EUR/USD today moved sideway before the GDP report. The currency pair began to rise after the report showed that the US economy in the second quarter of this year grew with slower pace than was expected. Yet EUR/USD slumped after Federal Reserve Chairman hinted about possible increase of stimulus for the US economy today at the Federal Reserve Bank of Kansas City Economic Symposium, saying that “the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus”. (Event B on the chart.)
US GDP increased at an annual rate of 1.0% in the second quarter of 2011, according to the preliminary report. That was above the growth in the first quarter (0.4%), but below both the advance estimate (1.3%) and market expectations (1.1%). (Event A on the chart.)
Michigan Sentiment Index was at 55.7 in August, according to the revised sentiment. The value was above the preliminary figure of 54.9, but below July value of 63.7. Market analysts predicted the index to be at 56.2. (Event B on the chart.)
Yesterday, a report on initial jobless claims was released, showing an increase from 412k to 417k last week. (Not shown on the chart.)
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