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EUR/USD Surges as US Fundamentals Worsen

August 15, 2011 (Last updated on August 16, 2011) by

This day was rather unfavorable for the US dollar as fundamental reports were far worse than was expected. EUR/US jumped as a result. Market analysts promised that US manufacturing would expand and purchases of US long-term securities would increase. Today’s reports proved such optimistic forecasts to be completely wrong.

NY Empire State Index slid to -7.7 in August from -3.8 in July, indicating that conditions for New York manufacturers continues to worsen. That’s can be considered a disastrous result, especially compared with the anticipated advance to 0.5. (Event A on the chart.)

Net foreign purchases of US Treasuries decreased to $3.7 billion in June from $24.2 billion in May. That’s another depressing report, showing that market participants were too optimistic to expect an increase to $30.4 billion. (Event B on the chart.)

EUR/USD for 2011-08-15

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