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EUR/USD Extends Rally with Slowdown of U.S. Economic Growth

July 15, 2010 by

EUR/USD advanced for the third day on today’s Forex session after Spain auctioned its debt, easing concern for the nation’s fiscal system and for Eurozone economy, while news from the U.S. remain bad. True that the U.S. economy continues to expand, but with the constantly slowing pace how long can it sustain its growth? EUR/USD is now trading near 1.2857.

The Producer Price Index (PPI) fell 0.5% in June, following decline of 0.3% in May. This decrease was bigger than expected 0.2%.

Initial jobless claims decreased to 429k applications during the past week from a previous revised reading of 458k applications. Traders expected decline to 448k.

NY Empire State Manufacturing Index fell sharply to 5.1 in July from June value of 19.6, indicating that, while conditions for New York manufacturers continued to improve in July, the pace of growth in business activity slowed substantially over the month. Forecasts missed the actual figure significantly, as they suggested a decline to only 18.3.

Industrial production went up 0.1% in June after having risen 1.3% in May. Analysts expected no change (zero growth). The capacity utilization rate for total industry remained unchanged in June at 74.1%, while market participants expected a slight advance to 74.2%.

Philadelphia Fed index dropped to 5.1 in July from 8.0 in June. This reading frustrated analysts, who predicted an increase to 10.2.

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

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