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EUR/USD Rallies as Trichet Says Interest Rate Hike Possible

March 3, 2011 by

EUR/USD climbed today as European Central Bank President Jean-Claude Trichet said that the interest rates may be higher next month. The ECB maintained its benchmark interest rate unchanged at 1% today. The economic reports were in line with the analysts’ forecasts today, except the report about the jobless claims that was far better than expected. EUR/USD currently trades at 1.3936.

Initial jobless claims decreased to 368k from the previous week’s revised figure of 388k. The actual reading frustrated the pessimistic forecast that promised an increase to 394k. (Event A on the chart.)

Nonfarm productivity increased at the 2.6% annual rate during the fourth quarter of 2010, as analysts predicted. The revised estimate was the same as the previous reading and higher than 2.4% growth in the third quarter. (Event A on the chart.)

ISM services increased to 59.7% in February. The actual value was near the predicted value of 59.6% and the previous reading of 59.4%. (Event B on the chart.)

EURUSD for 2011-03-03

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