EUR/USD Sinks After German Economic Sentiment, US Retail Sales

EUR/USD sank today. The currency pair started the decline during the early European trading session and continued to fall after the release of the worsening German economic sentiment (event A on the chart) and better-than-expected US retail sales.

Retail sales, both headline and underline, rose 0.4% in June from the previous month, whereas analysts had expected an increase of 0.1%. Both received a negative revision to the increase in May from 0.5% to 0.4%. (Event B on the chart.)

Import and export prices declined in June. Import prices dropped 0.9% versus the market consensus of a 0.7% drop. The May reading got a positive revision from a 0.3% fall to no change. Export prices fell 0.7% in June following the 0.2% decline in May. (Event B on the chart.)

Industrial production was unchanged in June. That is compared with the forecast of a 0.1% increase and the 0.4% gain registered in May. Capacity utilization fell to 77.9% from 78.1%, whereas expert had expected the indicator to stay about unchanged. (Event C on the chart.)

Business inventories rose 0.3% in May. That was a slower rate of growth than 0.4% predicted by analysts and 0.5% logged in April. (Event D on the chart.)

Net foreign purchases were at the surprisingly low level of just $3.5 billion in May. That is compared with the forecast of $32.2 billion and $46.9 billion posted in April. (Event E on the chart.)

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EUR/USD Fails to Maintain Rally, Pushed Down by US CPI

EUR/USD was attempting to extend yesterday’s rally today but failed and was trading near the opening level after the US Consumer Price Index beat expectations. With unemployment claims being also better-than-expected, the dollar got enough support to rebound a bit.

US CPI rose 0.1% in June, the same as in May, while analysts were expecting no change. (Event A on the chart.)

Initial jobless claims were at the seasonally adjusted level of 209k last week, down from the previous week’s revised level of 221k. Experts had predicted just a mild decrease to 220k. (Event A on the chart.)

Treasury budget deficit shrank sharply to $8.5 billion in June down from $207.8 billion in May. The actual value was not far from the consensus forecast of a $7.9 billion deficit. (Event B on the chart.)

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