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EUR/USD Continues Move Down as ECB Predicts Recession

August 9, 2012 by

EUR/USD continued its downward trend today as the European Central Bank failed to deliver anything material after it has promised earlier to support the eurozone. Moreover, the central bank revised its forecast for the decline of the region’s economy from 0.2% to 0.3%. At the same time, the data from the United States showed that the trade deficit shrank and unemployment claims fell.

US trade balance deficit shrank to $42.9 billion in June down from $48.0 billion in May. Analysts thought that it would stay almost unchanged at $47.4 billion. (Event A on the chart.)

Initial jobless claims fell from 367k to 361k last week. Market participants were betting that the claims would rise to 371k. (Event A on the chart.)

Wholesale inventories demonstrated the drop by 0.2% in June. That is instead of the expected rise by 0.3%. Furthermore, the May reading was revised from 0.3% to 0.0% (no growth). (Event B on the chart.)

EUR/USD for 2012-08-09

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