EUR/USD jumped today as US inflation beat forecasts, supporting the case for smaller stimulus from the Federal Reserve. Fed Chairman Ben Bernanke testifies this week and Forex market participants wait for his comments that may help to gauge the future moves of the US central bank. Previous Bernanke’s speeches had a great impact on the market and there is no reason to believe that things will be different this time.
CPI increased 0.5% in June, beating the forecast of 0.3% and the May’s increase of 0.1%. (Event A on the chart.)
Net foreign purchases fell by $27.2 billion in May after dropping by $21.8 billion in April (revised from the drop of $37.3 billion). It was an unpleasant surprise to market participants, who have expected an increase by $14.3 billion. (Event B on the chart.)
Industrial production rose 0.3% in June, in line with forecasts, after demonstrating no change in May. Capacity utilization remained almost unchanged at 77.8%, matching predictions. (Event C on the chart.)
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