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EUR/USD Hits 2-Month High as Foreign Purchases Barely Cover U.S. Domestic Sale

December 15, 2008 by

EUR/USD posted a fourth day of growth today and soared to its highest level since October 15 as the macroeconomic outlooks worsen further for the U. S. The reports on the manufacturing sector confidence, the international capital and the industrial production flows disappointed investors and the dollar bulls. EUR/USD is currently trading near 1.3564.

NY Empire State index fell slightly in December — from -25.4 to -25.8, setting a new record low. The good thing is that it didn’t fell to -27, where it was expected to land according to the analysts’ forecasts.

Net purchases of the U.S. long-term securities declined from $65.4 billion (revised down from $66.2 billion) in September to $1.5 billion in October. That’s quite a disastrous result, considering the foreign purchases barely cover the domestic sale, while the markets expected a value close to $40 billion for October net purchases.

Industrial production decreased by 0.6% in November, following 1.5% growth in October (revised up from 1.3%) — a little worse than the average estiamte of -0.5%. Capacity utilization dropped from 76% (revised down from 76.4%) to 75.4% that month — well below the 75.9% estimate.

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