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EUR/USD Up on Negative CPI, Industrial Production Drop

January 16, 2009 by

EUR/USD rose from its monthly low today — for the first time this week — after the U.S. reports on CPI and industrial production failed to meet the traders’ extremely pessimistic expectations. The better outcome for the U.S. economy means a better outcome for the global economy, which is good for such currencies as the euro. EUR/USD is currently trading near 1.3281.

CPI (seasonally adjusted) decreased by 0.7% in December after losing 1.7% a month earlier. The market analysts expected that the consumer prices will fall by 1% that month.

Industrial production continued to fall in U.S. last month — it lost 2% after falling by 1.3% in November — that’s far worse than the forecasts’ 0.8% decline. Capacity utilization dropped from 75.2% to 73.6%, while a drop to just 74.7% was expected for December.

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