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Tuesday, September 21, 2010

Good US Reports Boost Risk Appetite, Pushing EUR/USD Higher



The euro extended its rally against the dollar today as good reports from the US, including report on Producer Price Index and unemployment claims, increased investors’ risk appetite. Philadelphia Fed Business Outlook Survey said that “regional manufacturing activity was nearly flat in September”. EUR/USD trades now near 1.3096 after rising to intraday high of 1.3108, the highest level since August 11.
Producer Price Index (PPI) increased 0.4% in August, following a 0.2% advance in July. The forecast growth was 0.3%.
Initial jobless claims decreased from 453k to 450k last week. Forecasts clearly were wrong, expecting an increase to 463k.
US current account balance deficit increased to $123.3 billion (preliminary) in the second quarter of 2010, from $109.2 billion (revised) in the first quarter of 2010. Experts almost guessed the actual figure, promising an increase to $124 billion.
Net long-term purchases of the U.S. securities by the foreign investors were at $61.2 billion in July, compared to a previous reading of $44.4 billion and an expected decline of $37.9 billion.
Philadelphia Fed index advanced from -7.7 in August to -0.7 in September. Although the index rose, it was below a forecast value of 0.9.

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