Aug 19 2008
Building Permits On Tap - Might Take The USD Further Up.
The greenback completed yesterday’s trading session with mostly bullish trends against its top currency crosses, besides vs. the JPY. The only economic data release that came out of the U.S. was the NAHB Housing Market Index that was released at the exact forecast and didn’t cause much volatility. The USD took advantage of the European currencies as they showed bearishness, but lost momentum to the JPY.
Against the EUR, the USD was traded under 1.47, however it lost strength against the Yen and was traded under 110.
The economic survey of the NAHB Housing Market Index showed a bad outlook for housing starts, but it was released at the exact forecast so there was no big surprise and the USD wasn’t affected much. The USD did lose some momentum because of speculation that the U.S. government will be forced to bail out Fannie Mae and Freddie Mac, the biggest mortgage-finance companies. An anonymous Bush administration source, reported that the government is pressing the companies to raise more money to guard against losses but doesn’t expect the companies to succeed and this caused weakness for the USD. The USD did take advantage of the weak EUR that lost strength because of the much lower than expected Trade Balance that was released.
USD trading will be more interesting today as a batch of important economic data is expected to be released. Most of the news will come out at 12:30 GMT with the Building Permits, Housing Starts, PPI and Core PPI expected to be announced. All of these releases, besides the Core PPI are expected to be lower than their previous figures and thus the USD could show bearishness today. The Core PPI is expected to stay unchanged at 0.2% and not affect the USD much. Look for more volatility at 2:00 GMT with Federal Reserve Bank of Dallas President Richard Fisher is expected to deliver a speech titled “Monetary Policy in a Technology Driven World” at the Progress and Freedom Foundation 2008 Summit in Aspen.
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