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EUR/USD Rises, Pares Gains After US Data

October 16, 2020 by

EUR/USD was rising during Friday’s trading session but has pared gains after the release of better-than-expected US macroeconomic reports, specifically retail sales and the University of Michigan consumer sentiment index. The currency pair ended trading just slightly above the opening level.

Retail sales climbed by 1.9% in September, exceeding the median forecast of a 0.7% increase and the previous month’s 0.6% rate of growth. (Event A on the chart.)

Both industrial production and capacity utilization fell in September. Industrial production decreased by 0.6%, whereas analysts had predicted an increase at the same rate. The indicator rose by 0.4% in the preceding month. Capacity utilization decreased from 72.0% in August to 71.5% in September, while experts were expecting it to stay about unchanged. (Event B on the chart.)

Business inventories increased by 0.3% in August, matching forecasts exactly, after rising by 0.1% in July. (Event C on the chart.)

Michigan Sentiment Index rose to 81.2 in October from 80.4 in September according to the preliminary estimate. Market participants were expecting a small decrease to 80.2. (Event C on the chart.)

Federal budget balance shrank to $124.6 billion in September from $200.1 billion and was close to the consensus forecast of $123.3 billion. (Event D on the chart.)

Net foreign purchases were at $27.8 billion in August. That compared with the median forecast of $20.0 billion and the previous month’s figure of $11.3 billion. (Event E on the chart.)

If you have any comments on the recent EUR/USD action, please reply using the form below.

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