EUR/USD unexpectedly soared by more than 50 points following the release of the retail sales data in the United States. The reaction was generally justified, considering the disastrous numbers but still a bit overdone. The currency pair has corrected following its rally, paring some of the gains.
Retail sales did not grow in July at all. They were expected to rise by 0.2%, following the same growth rate in June. (Event A on the chart.)
Business inventories rose by 0.4% in June following 0.5% growth in May. The report came out in line with the median forecast. (Event B on the chart.)
Crude oil inventories increased by 1.4 million barrels last week, ending a rather long series of declines (previous report showed a drop by 1.8 million barrels). Total motor gasoline inventories added 1.2 million barrels during the same time, following a drop by 4.4 million barrels a week earlier. (Event C on the chart.)
Yesterday, a report on the US treasury budget demonstrated a deficit of $94.6 billion for the month of July. It was $97.6 billion a year ago. The median forecast for deficit was $96 billion, so the reported number was somewhat positive for the US dollar. (Not shown on the chart.)
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