USD – Poor Data From States Disappoints

Caution and tentative trading came back into the broad markets swiftly on Wednesday as economic data from the U.S. managed once again to emphasize that not all is well. The USD gained on the EUR and GBP after the Building Permits and Housing Starts both proved negative. The gains by the Greenback were not accomplished with much volatility, but there is no denying that risk appetite took a hit and investors promptly began to express weary trading on Wall Street too. The Building Permits outcome was .57 million compared to the anticipated figure of .63 million and the Housing Starts numbers were equally disappointing. Crude Oil Inventories also showed an increase, perhaps indicating that even though Americans are driving in their historically high usage months that demand is not significant. Today the States will release weekly Unemployment Claims and the Philly Fed Manufacturing Index.

Although risk appetite did raise its head earlier, it does appear that the bad data yesterday combined with previously discouraging retail and jobless reports put a dent into sentiment. The Fed report from Philadelphia and the Unemployment numbers today could be enough to cause volatility if they do not provide better outlooks – and it should be noted that both publications are anticipated to be rather flat. Meaning that Wall Street could use any additional bad news today to trade lower and the USD may find investors grasping for safe havens. Tomorrow there will be a lack of economic news from the States and this means that today is likely to be heavily influenced by the data on the calendar and the prospects for a robust recovery. Having seen rather lackluster releases come from the U.S. the past two weeks, investors could not be faulted for thinking that negative news may highlight the day.

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