Forex Blog

U.S. fundamental statistics, that were released today in abundance, appeared to be worse than the market analysts expected. It helped the EUR/USD currency pair to reach its new absolute maximum value at 1.5968 and kept dollar bearish also against the other major currencies.

CPI (Consumer Price Index) rose 0.3% in March — at the same pace as expected. In February this indicator was at 0%.

Housing starts and building permits declined rapidly in March — they were at 947k and 927k respectively, while the forecast values were at 1,010k and 970k respectively. In February housing starts were at 1,075k and building permits were at 984k. All numbers are presented at a seasonally adjusted annual rate.

Industrial production showed a surprise growth at 0.3%, while a fall by 0.1% was expected and it fell 0.7% in February. Capacity utilization remained at the same level in March as in February and as expected — 80.3%.

Crude oil inventories dropped 2.3 million and are in the lower half of the average range for this time of year, as the Energy Information Administration reported.

The EUR/USD currency pair reached its new absolute maximum earlier today at 1.5902, but it has significantly corrected already and is trading around 1.5750 level.

The first falling indicator that went out today to negatively affect the financial situation on the global market and weaken the U.S. dollar further was the NY Empire State Index for March, it decreased from -11.7 to -22.2, its new all-time record low level. The economic analysts forecasted that it will go up to -5.

Industrial production and capacity utilization report was very disappointing too. Industrial production in February fell 0.5% after the January’s 0.1% growth and the 0.1% forecasted fall for February. Capacity utilization decreased from 81.5% to 80.9% (it was expected to fall to 81.3%).

Net foreign purchases of the long-term securities in January were very optimistic — they went up from $56.5 billion to $62.0 billion, showing that the foreign investors are still interested in the U.S. securities.

This week ends far worse for dollar bulls than they may have expected. Only Wednesday was an uptrend day for the U.S. dollar, but it didn’t gain a lot that day. Friday brought in the break through the 1.4700 resistance level on EUR/USD. Some disappointing data on the net foreign purchases and the manufacturing survey were the most important causes of today’s dollar’s decline.

Export and import prices in January grew faster than expected and this can be a positive sign for U.S. economy. Export prices index increased 1.2%, while import prices index increased 1.7%. Expected levels of growth were 0.3% for both of them.

NY Empire State Index — compiled through a survey of manufacturing sector — showed a very sharp decline this month. It went down from 9.0 to -11.7. For the first time since May 2005 it slid down below the zero level .

Net foreign purchases of the long-term securities in December were at $56.5 billion, which is much lower than $76.0 billion expected. Now the inflow barely covers the U.S. trading deficit.

Industrial production and capacity utilization in January weren’t good or bad, they were at the same levels as they have been expected by the analysts. The industrial production grew by 0.1% (the same as in December), while the capacity utilization was at 81.5% (the same as revised December’s value).