EUR/USD Tumbles as Europe’s Crisis Worsens

EUR/USD slumped today, erasing all gains of this week, as the European leaders can’t find an agreement about measures to deal with the sovereign-debt crisis. Greece’s credit rating was downgraded to the lowest possible ‘CCC’ on June 13. The fears of the possible default drove the euro to the downside even as the US economic data was very poor today. EUR/USD trades at 1.4218 now, falling from 1.4438.
CPI increased 0.2% in May on a seasonally adjusted basis, in line with analysts’ expectations. The growth in April was 0.4%. (Event A on the chart.)
NY Empire State Index brought an unpleasant surprise to Forex market participants, falling to -7.8 in June from 11.9 in May, while forecasters said that the index would climb to 13.0. The index slipped below zero for the first time since November. (Event A on the chart.)
Net foreign purchases of long-term securities were $30.6 billion in April. The figure is higher than the March reading of $24.0 billion, but lower than forecast of $45.3 billion. (Event B on the chart.)
US industrial production and capacity utilization in May were worse than forecasts promised. Industrial production rose 0.1%, compared to the forecast 0.3%. The production posted no change in April. Capacity utilization remained unchanged at 76.7%, while economists anticipated an increase to 77.1%. (Event C on the chart.)
Crude oil inventories decreased by 3.4 million barrels and total motor gasoline inventories increased by 0.6 million barrels last week. (Event D on the chart.)


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