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Dollar Suffers from Lower Industrial Production

November 16, 2007 (Last updated on December 2, 2009) by

EUR/USD stopped its fall today and jumped back up to 1.4670 levels on Forex after today’s Federal Reserve release on industrial production. In this October industrial production fell by 0.5% after 0.2% growth in September and median expectation at 0.1% for this month. That means that FOMC will probably need to adjust U.S. interest rates once again to stimulate economy growth.

With the decrease of industrial production, economy of the Unites States showed a decrease in industrial capacity utilization (which, of course, could be a cause for production drop). It fell from September’s 82.2% to 81.7%, while an insignificant difference was expected (82.0%).

While Henry Paulson of U.S. Treasury spoke that Government will conduct a “strong dollar” policy. Its hardly can be done with such economical indicators reports. “Currency will represent the U.S. economical growth” — that was the main idea of Paulson’s speech. But if economy is taking damage? Dollar will continue its demise.

Net foreign purchases of the long-term U.S. securities in September were at $55.4 billion. This is better than the August’s negative -$33.6 billion, but worse than expected number ($66.0 billion) and average 2006 monthly net foreign purchases ($97.2 billion).

One Response to “Dollar Suffers from Lower Industrial Production”

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    The Eur/Usd seems to be on its way back up. Our forex signals service predicted the pivot times today on this pair quite accurately. Come check us out if you have the time. Keep up the great work on the site.



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