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EUR/USD Falls for First Day in Four

December 23, 2015 by

EUR/USD dropped today after three consecutive sessions of gains. Economic data released from the United States was mixed, providing no clue about timing of the next interest rate hike from the Federal Reserve. Trading has been slow lately and will likely remain such until the end of the holiday season.

Both personal income and spending rose 0.3% in November. The income growth was above the median forecast of 0.2% but below the October’s 0.4%. The increase of spending was in line with expectations while the previous month’s reading was revised to no change from the small increase of 0.1%. Core PCE inflation was at 0.1%, exactly as analysts had predicted, compared to the reading of less than 0.1% (virtually no inflation) in October. (Event A on the chart.)

Durable goods orders were flat in November after rising 2.9% in October. Still, it was a better reading than the predicted drop by 0.6%. (Event A on the chart.)

New home sales were at the seasonally adjusted annual rate of 490k in November, up from the revised rate of 470k in October (495k before the revision) but below the predicted rate of 507k. (Event B on the chart.)

Michigan Sentiment Index rose from 91.3 in November to 92.6 in December according to the revised estimate. It was higher than the preliminary reading of 91.8 and analysts’ forecasts of 92.1. (Event B on the chart.)

US crude oil inventories shrank by 5.9 million barrels last week, though they remained close to the record level for this time of year. It was a surprise to experts who had anticipated an increase by 1.4 million. The reserves grew by 4.8 million in the preceding week. Total motor gasoline inventories were up 1.1 million barrels but were in the lower half of the average range. (Event C on the chart.)

Yesterday, several reports were released. (Not show on the chart.)

US GDP grew 2.0% in Q3 2015 according to the third and final estimate. That is compared to the consensus prediction of 1.9%, the second estimate of 2.1% and 3.9% increase in Q2.

New home sales fell to the seasonally adjusted annual rate of 4.76 million in November (lowest since April 2014) from the downwardly revised 5.32 million in October while specialists had predicted them to stay at the same level.

Richmond Fed manufacturing index was at 6 in December, an improvement from the November’s value of -3. Economists had promised a smaller increase to just -1.

EUR/USD for 2015-12-23

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