EUR/USD sank today, erasing all of the gains it had managed to acquire during the rest of the week. Some market analysts explained the move by the weakness of global stocks that drove traders towards the safety of the dollar. As for US data, it was largely underwhelming, with the exception of personal income and PCE inflation.
Personal income and spending rose in January. Personal income climbed by 10.0%, exceeding the average forecast of 9.4%, after increasing by 0.6% in the previous month. Personal spending rose by 2.4%, missing the forecast of 2.6%, after falling by 0.4% in December (revised from a decline of 0.2%). Core PCE inflation remained unchanged at 0.3%, whereas economists were expecting it to slow to 0.1%. (Event A on the chart.)
Chicago PMI dropped from 63.8 in January to 59.5 in February. While market participants were expecting a drop, they were counting on a smaller decline to 61.0. (Event B on the chart.)
Michigan Sentiment Index fell to 76.8 in February from 79.0 in January according to the revised estimate. That is compared with the consensus forecast of 76.5 and the preliminary reading of 76.2. (Event C on the chart.)
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