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EUR/USD Strengthens Supported by Improving US Data

December 22, 2020 by

The EUR/USD currency pair had begun trading lower about an hour before the release of the improved US GDP assessment for the third quarter of this year. Other fundamental indicators reported today were rather mixed but they, nonetheless, continued to push the dollar up against the euro.

US GDP rose by 33.4% in Q3 2020 according to the final (third) estimate. The reading was somewhat better than in the preliminary estimate and in the average forecasts (33.1%). The US economy contracted by 31.4% in Q2 (revised positively from a 31.7% decline). (Event A on the chart.)

Richmond Fed manufacturing index went up from 15 in November to 19 in December, faring much better than the market participants had expected (a decline to 11). (Event B on the chart.)

Consumer confidence continued to disappoint dollar bulls in December, going down from 92.9 (revised from 96.1) to 88.6. A moderate improvement to 97.1 was priced in by the traders. (Event B on the chart.)

Existing home sales were at a seasonally adjusted annual rate of 6.69 million in November, down from 6.86 million reported for October but almost in line with the forecasts of 6.70 million. (Event B on the chart.)

EUR/USD as of 2020-12-22

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