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16/08/24
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EUR Inches Up, USD Under Pressure
On Friday, the euro inched up and EUR/USD traded at about 1.0994, up 0.21% for the day in the European session.
The USD is under pressure and the euro this week gained as much as 1.2% before trimming about half of those gains. On Wednesday, the euro reached 1.1047, the highest level against the dollar this year.
Investors are more pessimistic about economic conditions. In August eurozone investor sentiment dropped to 17.9, down sharply from 43.7 in July. That was the lowest reading since Nov. 2023.
The biggest economy in the eurozone, Germany, showed a similar trend. There are significant uncertainties about the German and eurozone economies and these fears increased as a result of the recent global stock market turmoil.
The US jobs report two weeks ago was softer than expected, leading to a meltdown across stock markets globally. Investors feared that the US economy was moving towards a recession but this week, the markets managed to recover due to solid US numbers.
In July, US inflation dropped to 2.9% y/y, slightly down from 3% in June which was also the market consensus. Retail sales in July rose by 1% m/m, bouncing back from June’s -0.2% and much higher than the 0.4% market estimate. Unemployment claims were also lower than market estimates for a second consecutive week.
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