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EUR/USD Rebounds on Equities Optimism

February 1, 2010 by Jan Baros

The dollar started the week reverting last week’s trend versus the euro and dropped as risk appetite reappeared in markets this Monday, forcing equities up and declining appeal for the safety of the greenback. Personal spending and income increased in the U.S. adding appeal for riskier assets as ISM PMI index rose for another month. EUR/USD currently trades at 1.3915.

Personal income rose 0.4% in December, from a previous advance of 0.5% in November (revised). Personal spending had a less significant rise at 0.2% from a previous revised reading of 0.7%. Forecasts were very near actual figures, expecting income to grow 0.4% as it was confirmed and spending at 0.3%. Core PCE price index rose 0.1% as forecasts expected.

ISM PMI Index rose to 58.4 in january, the sixth consecutive increase from a previous reading of 54.9. Forecasts expected and advance to 55.5 to this index.

Total construction spending frustrated forecasts and declined 1.2% in December from a previous decline of 0.6%. Forecasts expected a decline of just 0.4%.

If you have any comments on the recent EUR/USD action, please, reply using the form below.

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