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EUR/USD at Highest Since August 2015 After ECB Meeting

July 20, 2017 by

EUR/USD reached flash highs today, rising to the strongest level since August 2015, after the European Central Bank monetary policy decision (event A on the chart) and the press-conference of ECB President Mario Draghi (event B on the chart). While the central bank kept its policy unchanged, Draghi mentioned that policy makers will discuss adjustments of the bond-buying program in fall. Market participants thought that the discussion may result in quantitative easing tapering, perhaps as early as September, and eventual monetary tightening next year.

As for US economic data, it was mixed today. Jobless claims and leading indicators were better than expected, but the manufacturing index demonstrated a bigger-than-expected drop.

Initial jobless claims fell from 248k to 233k last week. Analysts expected the indicator to be little changed at 245k. (Event B on the chart.)

Philadelphia Fed manufacturing index slumped from 27.6 in June to 19.5 in July, far below the forecast level of 23.4 and to the lowest since November. (Event B on the chart.)

Leading indicators climbed 0.6% in June, demonstrating faster pace of growth than the predicted 0.4% and the previous month’s revised rate of growth of 0.2% (0.3% before the revision). (Event C on the chart.)

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

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