German Economic Sentiment & US CPI Drive EUR/USD Lower

EUR/USD dropped today as the German Economic Sentiment Index fell this month, dropping for the sixth month in a row. (Event A on the chart.) Meanwhile, US inflation accelerated, while market participants have expected it to slow. Even the poor housing report from the United States did not prevent the dollar from gaining on the euro.
Both housing starts and building permits fell in May. Housing starts were down from 1.07 million in April to 1.00 million in May, while building permits edged down from 1.06 million to 0.99 million (both seasonally adjusted). Market expectations were at 1.04 million and 1.07 million respectively. (Event B on the chart.)
US CPI increased 0.4% in May. This is compared with the previous month’s reading of 0.3% and the predicted value of 0.2%. (Event B on the chart.)

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