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Majority of US Reports Bad, Dollar Falls vs. Euro

January 15, 2016 by

The US dollar sank versus the euro today as the majority of US economic reports released over the trading session were rather bad. This might mean the Federal Reserve will wait longer before hiking interest rates again. The dollar was soft even though the market sentiment deteriorated because of worries about the struggling economy of China, increasing demand for safe currencies.

PPI fell 0.2% in December, exactly as specialists had predicted, after rising 0.3% in November. (Event A on the chart.)

Retail sales were down 0.1% in December, also matching predictions. The November’s increase was revised from 0.2% up to 0.4%. (Event A on the chart.)

NY Empire State Index dropped from -4.6 in December to -19.4 in January. Market participants were completely unprepared to the slump as they were expecting the index to rise to about -4.1. (Event A on the chart.)

Industrial production and capacity utilization also deteriorated in December. Production was down 0.4% compared to the predicted drop of 0.2%. Moreover, the November’s reading was revised from -0.6% to -0.9%. Capacity utilization rate slipped 0.4 percentage point to 76.5% while experts had promised it to stay almost unchanged. (Event B on the chart.)

Michigan Sentiment Index climbed to 93.3 in January according to the preliminary estimate while analysts had expected it to remain close to the December’s level of 92.6. (Event C on the chart.)

Business inventories shrank by 0.2% in November whereas forecasters yet again were promising no change. The October’s change was revised from 0% to -0.1%. (Event C on the chart.)

EUR/USD as of 2016-01-15

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