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EUR/USD Tumbles on Boring ECB, Fears of Coronavirus

January 23, 2020 by

EUR/USD declined today after the uninspiring monetary policy meeting of the European Central Bank, which failed to bolster the currency and turned out a non-event. Meanwhile, the dollar was getting help from fears of the spreading coronavirus, which originated in China. The greenback, being considered a safe currency, tends to profit in times when investors seek a safe haven.

Seasonally adjusted initial jobless claims were at 211k last week, up from the previous week’s revised level of 205k. That is compared with the median forecast of 214k. (Event A on the chart.)

Leading indicators fell by 0.3% in December following a 0.1% increase in November. The actual drop was slightly bigger than the market consensus of a 0.2% decline. (Event B on the chart.)

US crude oil inventories fell by 0.4 million barrels last week and were below the five-year average for this time of year. Experts had predicted a slightly smaller decline of 0.1 million barrels. The stockpiles decreased by 2.5 million barrels the week before. Total motor gasoline inventories increased by 1.7 million barrels and were above the five-year average. (Event C on the chart.)

Yesterday, a report on existing home sales was released, showing an increase to a seasonally adjusted annual rate of 5.54 million in December up from 5.35 million the month before, above the analysts’ average estimate of 5.43 million. (Not shown on the chart.)

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

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