EUR/USD fell for the third day in a row despite turmoil in the US government. The dollar got some support from today’s macroeconomic reports, which were good for the most part, with the exception of the housing data. But the most important reason for the greenback’s rally was anticipation of an interest rate hike from the Federal Reserve next week.
Housing starts and building permits fell in February. Housing starts were at the seasonally adjusted annual rate of 1.24 million versus 1.29 million predicted by analysts and 1.33 million registered in the previous month. Building permits were at the seasonally adjusted annual rate of 1.30 million, compared to the average forecast of 1.32 million and 1.38 million logged in January. (Event A on the chart.)
On the other hand, industrial production and capacity utilization increased in February. Industrial production climbed 1.1% following the 0.3% decline in January. Analysts had expected an increase by just 0.3%. Capacity utilization rose from 77.4% to 78.1%, beating market expectations of 77.7%. (Event B on the chart.)
Michigan Sentiment Index advanced from 99.7 in February to 102.0 in March according the preliminary estimate. That was totally opposite to the decline to 99.2 predicted by experts. (Event C on the chart.)
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