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EUR/USD Continues to Fall on U.S. Optimism

December 15, 2009 by

The EUR/USD currency pair continued to fall today as optimism towards the U.S. economy and a change in Federal Reserve monetary policy attracted more investors to purchased dollar-priced assets. In Europe, a frustrating economic sentiment report forced the European common currency down versus most of the main traded options in foreign-exchange markets and touched the lowest rate versus the greenback in two months. EUR/USD remains bearish at a current level of 1.4555.

Producer Price Index (PPI) rose 1.8% in November from a previous advance of 0.3% in October. The actual figures beat forecasts that suggested an increase of 0.8%.

N.Y. Empire State Manufacturing index declined significantly to 2.6 in December from a previous reading of 23.5 in the past month. Forecasts indicated an advance to 24.7 which was not confirmed, but the index reading above 0 still showed a timid improvement.

Net long-term purchases of the U.S. securities by the foreign investors touched $20.7 billion in October, frustrating forecasts that expected a net value of $38.3 billion, and posting a decline from September when it reached $40.7 billion.

Industrial production and capacity utilization rose in the month of November, with an advance of 0.8% for the industrial production which remained neutral at 0.0% in the previous reading (revised) and surpassed forecasts at 0.6%. Capacity utilization rate grew to 71.3% from a revised advance 70.6% in October and near estimates at 71.1%.

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