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US Economy Slows in April, EUR/USD Goes Up and Down

May 17, 2011 by

EUR/USD advanced today and failed later, then rose again only to drop even lower. Currently the euro attempts to climb again, but without any significant success so far. The economic reports today extended yesterday’s tendency to disappoint Forex market participants (at least those who bet on dollar’s strength) as the data confirmed that the US economy performed in April worse than in March. EUR/USD currently trades near 1.4173, erasing its jump to as high as 1.4223.

Housing starts and building permits decreased in April. Housing starts were at a seasonally adjusted annual rate of 523k in April, below the revised March estimate of 585k. Building permits were at a seasonally adjusted annual rate of 551k in April, below the revised March rate of 574k. The report contradicted forecasts that promised an increase by 580k and 590k respectively. (Event A on the chart.)

Industrial production and capacity utilization rate in April was below forecast and the March readings. Industrial production was unchanged in April, following the increase by 0.7% in March. Capacity utilization dropped to 76.9% in April from 77.0% in March. The predicted values were 0.5% growth for production and 77.7% for utilization rate. (Event B on the chart.)

EURUSD for 2011-05-17

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