EUR/USD Drops as Data Suggests Further Tapering

EUR/USD continued to fall today as positive macroeconomic data supported the view that the Federal Reserve will taper its quantitative easing program more in the future. US policy makers continue to show confidence in their ability to reduce stimulus without damaging the economy and such outlook is positive for the dollar.
Initial jobless claims were at 326k last week, little changed from the previous week’s 328k and in line with forecasts. (Event A on the chart.)
CPI rose 0.3% in December, matching traders’ expectations exactly, after showing no change in the preceding month. (Event A on the chart.)
Net foreign purchases fell by $29.3 billion in November after rising by $28.7 billion in October (revised down from $35.4 billion). Analysts have forecast an increase of $42.3 billion. (Event B on the chart.)
Philadelphia Fed manufacturing index was at 9.4 in January, above the expected reading of 8.8 and the December figure of 6.4 (revised from 7.0.). (Event C on the chart.)

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