EUR/USD declined for the second consecutive day during the current trading session as housing data from the United States exceeded market expectations. Today’s positive report followed Friday’s releases that were very disappointing for dollar bulls. Meanwhile, the German economic sentiment dropped to the lowest level since December, pushing the euro further down against the dollar. (Event A on the chart.)
Both housing starts and building permits rose basically at the same seasonally adjusted annual rate of 1.14 million in April versus the forecasts of 1.02 million and 1.06 million respectively. Housing starts increased by 0.94 million in February while building permits grew by 1.04 million. (Event B on the chart.)
On Friday (May 15), several reports were released. (Not shown on the chart.)
NY Empire State Index improved from -1.2 to 3.1 in May but not as much as analysts have expected (an increase to 5.1).
Industrial production and capacity utilization missed economists’ projections in April. Production fell 0.3% (at the same rate as in the prior month) in the third consecutive monthly loss while specialists anticipated a small increase by 0.1%. Capacity utilization rate shrank by 0.4 percentage point to 72.2% compared to the figure of 78.4% expected by market participants.
Michigan Sentiment Index sank to 88.6 in May from 95.9 in April, according to the preliminary estimate, while experts have thought that the index would remain almost unchanged at 95.8.
Net foreign purchases were at $17.6 billion in March, below the predicted value of $21.3 billion and the February’s rate of $20.9 billion.
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