EUR/USD dropped for a second trading session today as Federal Reserve Chairwoman Janet Yellen was testifying today. Yellen’s stance turned out to be not as dovish as it seemed. While the Chairwoman still believes that monetary accommodation remains appropriate, she also suggested that monetary tightening may happen sooner if the labor market continues to improve. Such comments allowed the dollar to gain on the euro even though US economic indicators were not particularly great.
PPI rose 0.4% in June on a seasonally adjusted basis. This is compared to the median forecast of 0.2% and the May drop by 0.2%. (Event A on the chart.)
Net foreign purchases were at $19.4 billion in May. The reading was below the market expectations of $27.4 billion but above the previous month’s value of -$41.2 billion. (Event B on the chart)
Both industrial production and capacity utilization rate missed analysts’ predictions in June. Production rose 0.2%, compared to the forecast of 0.4%, after rising 0.5% in May. Capacity utilization remained unchanged at 79.1% while experts predicted an increase to 79.4%. (Event C on the chart.)
US crude oil inventories shrank by 7.5 million barrels last week and are near the upper limit of the average range for this time of year. The drop was much bigger than predicted 2.1 million and the previous week’s decline by 2.4 million. Total motor gasoline inventories increased by 0.2 million barrels and are in the middle of the average range. (Event D on the chart.)
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