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EUR/USD Snaps Rally on Good US GDP & Consumer Sentiment

January 28, 2011 by

EUR/USD dropped today after it was rallying for more than a week. The US economic growth, while a little slower than was anticipated, is still good and consumer sentiment gradually improves. The currency pair rose at the beginning of the trading session, but later was mostly falling. EUR/USD trades now at 1.3657.

US GDP, according to the advance estimate, increased at an annual rate of 3.2% in the fourth quarter of 2010. While the increase was bigger than 2.6% in the third quarter, forecasts promised even faster growth at a rate of 3.5%. (Event A on the chart.)

University of Michigan Sentiment Index was 74.2 in January, below the 74.5 in December, but above the preliminary estimate of 72.7 and analysts’ expectations of 73.1. (Event B on the chart.)

EUR/USD as of 2011-01-28

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