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US Economic Growth Below Forecasts, EUR/USD Goes Higher

May 26, 2011 by

EUR/USD advanced today as the US economy expanded less than anticipated in the first quarter of this year and jobless claims unexpectedly increased. The currency pair jumped at the opening of the trading session and held its gains, slowly advancing on the negative US reports. EUR/USD trades currently at 1.4200.

US GDP grew 1.8% in the first quarter of 2011, according to the preliminary estimate, following the 3.1% growth in the fourth quarter of 2010. The reading was the same as in the previous “advance” estimate, while market participants expected a higher reading of 2.2%. (Event A on the chart.)

Initial jobless claims rose to 424k last week from the previous week’s revised figure of 414k. Forecasts promised a decrease to 403k. (Event A on the chart.)

EURUSD for 2011-05-26

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