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EUR/USD Falls for 3rd Day After Budget and Trade Deficit Reports

January 13, 2009 by

EUR/USD continued to fall for the third daily trading session today. It reached the lowest level since December 11 after reports on both budget deficit and trade balance deficit were released in U.S. today. Now EUR/USD is trading at 1.3194.

Trade balance deficit decreased from $56.7 billion (revised up from $57.2 billion) to only $40.4 billion in November — much faster than the analysts expected (the average forecast was at about $51 billion deficit). The main reason for such a strong narrowing is in the significant decline in oil prices that month.

Treasury budget deficit was reported at $83.6 billion for the month of December — that’s better the November’s $164.4 billion reading but significantly worse than December 2007 surplus of $48.3 billion. Economic strategists expected a surplus of about $33 billion from this report.

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