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EUR/USD Sinks, Driven by German Economic Sentiment

July 15, 2014 by

EUR/USD sank, despite today’s dovish speech of Federal Reserve Chairwoman Janet Yellen (event C on the chart), as the sentiment indexes for Germany and the whole eurozone unexpectedly plunged (event A on the chart), fueling concerns about the economic situation in Europe. As for US data, most of it was worse than anticipated with the notable exception of the New York manufacturing index.

Retail sales were up 0.2% in June, less than was predicted — 0.6%. The May increase was revised from 0.3% up to 0.5%. (Event B on the chart)

NY Empire State Index climbed from 19.3 in June to 25.6 in July instead of falling to 17.2 as analysts predicted. It was the highest reading in more than four years. (Event B on the chart)

Import prices increased 0.1% in June, compared to the predicted rise of 0.5% and the May growth of 0.3%. Export prices dropped 0.4% following the 0.1% increase in the previous month. (Event B on the chart)

Business inventories grew 0.5% in May, while experts were counting on the same rate of increase as in April — 0.6%. (Event C on the chart.)

On Friday (July 11), a report on treasury budget was released, showing a surplus of $70.5 billion in June. This is compared to the predicted excess of $79.5 billion and the deficit of $130.0 billion in May. (Not shown on the chart.)

EUR/USD-2014-07-15

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