US Sanctions on Turkey Drive EUR/USD Down

EUR/USD dropped to the lowest level in a year today on concerns that the negative impact of US sanctions against Turkey can spill over to the European banking system, which has strong exposure to Turkish assets. Positive US inflation data also weighed on the currency pair.
US CPI rose 0.2% in July on a seasonally adjusted basis, in line with expectations. Consumer inflation accelerated a bit from June’s 0.1%. (Event A on the chart.)
Treasury budget deficit widened from $74.9 billion in June to $76.9 billion in July. The actual figure was close to the value of $76.5 billion predicted by analysts. (Event B on the chart.)

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