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EUR/USD Sinks While Fed Considers End to Stimulus

November 20, 2013 (Last updated on November 21, 2013) by

EUR/USD slumped today even as macroeconomic data from the United States was poor. The minutes of the last Federal Reserve meeting revealed that policy makers thought that stimulus reduction may happen in the near future. The potential quantitative easing tampering was in the center of attention for some time and traders react to any news regarding this event.

Retail sales rose 0.4% in October after showing no change in September. The actual reading exceeded the forecast of 0.1% growth.

CPI fell 0.1% in October, while analysts predicted no change. The index increased 0.2% in September.

Existing home sales were at the seasonally adjusted rate of 5.12 million in October, trailing the market expectations of 5.17 million and the September value of 5.29 percent.

Business inventories expanded 0.6% in September. The growth was above expected 0.3% and August’s 0.4%.

Crude oil inventories increased by 0.4 million barrels last week, instead of falling by 0.2 million as was predicted, and are well above the upper limit of the average range for this time of year.The stockpiles grew by 2.6 million in the preceding week. Total motor gasoline inventories decreased by 0.3 million barrels, but are near the upper limit of the average range.

FOMC minutes were rather hawkish, saying that “if economic conditions warranted, the Committee could decide to slow the pace of purchases at one of its next few meeting”.

On Monday, a report on net foreign purchases was released, showing an increase to $25.5 billion in September after the drop to -$9.8 billion in August. The expected increase was smaller, to $21.3 billion.

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