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EUR/USD Drops Below 1.25 Sparking Talks About Euro’s Collapse

May 14, 2010 by

EUR/USD fell today below 1.2500 prompting speculation about future parity between the dollar and the euro. The future of the common European currency looks really grim amid concerns that Greece won’t be able to repay its debts and rumors that France threatened to leave the euro. At the same time, reports showed increasing confidence and willingness to spend their money amongst U.S. consumers. EUR/USD is trading near 1.2448 now.

U.S. retail sales seasonally adjusted rate increased 0.4% in April, while it has risen 2.1% (revised from 1.9%) in March. The growth about 0.3% was expected.

Industrial production and capacity utilization increased in April. Industrial production rose 0.8% in April, following the revised 0.2% advance in March and beating the forecast of 0.6% growth. Capacity utilization showed the increase to 73.7%, better than the previous figure of 73.1%, yet slightly below expectations of the analysts, who predicted an increase to 73.8%.

Preliminary University of Michigan Index of Consumer Sentiment increased to 73.3 from the previous reading of 72.2 (revised from 69.5). The economists expected somewhat higher increase of 73.5.

Business inventories expanded 0.4% in March, following the 0.5% increase in February. The growth matched forecasts.

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

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