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The Worse U.S. Economy Gets the Deeper EUR/USD Goes

January 22, 2009 by

Contrary to the common sense the EUR/USD declines when more bad news comes out from the U.S. — the world’s largest economy. Probably, the traders believe that if things are so bad in America, other countries will also get plundered by the recession. EUR/USD traded with almost no significant change during the first half of the trading session today, but now it’s down to near 1.2937 — more than 100 pips below its opening level.

Building permits were down to 549k in December — from 615k in November — significantly below the expected rate of 610k. Housing starts decreased to 550k in December from 651k in November, while the forecast value was at 605k.

Initial jobless claims increased to 589k last week — from 527k reported for a previous week. The market participants used 540k estimate before the report.

Crude oil inventories unexpectedly rose by 6.1 million barrels last week. Such a strong growth allows them to remain above the upper limit of the average range for this time of year.

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