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EUR/USD Halts Rally amid Deadlock in US Political Negotiations

December 21, 2012 by

EUR/USD dropped today on the deadlock in discussions about measures required to avoid the so-called fiscal cliff in the United States. The economic indices were good today with the exception of consumer sentiment, which was revised down from the preliminary reading.

Durable goods orders grew 0.7%, beating market expectations of 0.2% growth. The October reading was significantly revised from no change to a 1.1% increase. (Event A on the chart.)

Personal income and spending rose in November. Income increased 0.6%, compared to the previous month’s 0.1% and the expectations of 0.3%. Spending rose 0.4% last month, matching predictions, while it fell 0.1% in the month before. (Event A on the chart.)

Michigan Sentiment Index dropped to 72.9 in December, according the revised estimate, from the preliminary figure of 74.5, frustrating analysts who have predicted a reading of 74.9. That was a drop from the November’s 82.7. (Event B on the chart.)

EUR/USD for 2012-12-21

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