US PPI rises more than expected. Housing Starts decline. Dollar falls in forex trading. | CountingPips Forex Blog

August 19, 2008 - Forex Economic News

US PPI rises more than expected. Housing Starts decline. Dollar falls in forex trading.

U.S. Producer prices increased more than expected for the month of July and advanced to the highest annual rate in over 27 years. The Producer Price Index, released by the Department of Labor, increased by 1.2 percent in the month of July following an increase of 1.8 percent in June. The annual rate of increase for July showed that producer prices USD Forex Trading increased by 9.8 percent over last year and marked the highest annual increase since June of 1981. The increase in producer prices for June registered 9.2 percent over June 2007.

The monthly and annual increases surpassed market forecasts that were expecting a monthly rise of 0.6 percent and an annual rise of 9.3 percent. Helping to contribute to the higher ppi in July was the cost of energy which increased by 3.1 percent for the month. Core producer prices, excluding food and energy prices, rose by 0.7 percent in July following a rise of 0.2 percent in June and surpassing market expectations of a 0.2 percent gain.

Housing starts and building permits decline.

U.S. Housing Starts and Building Permits fell in the month of July according to data released by the Commerce Department on new residential construction. Housing Starts fell by 11.0 percent in July to a seasonally adjusted annual rate of 965,000 following June's 1,084,000 estimated housing starts. July's total was 29.6 percent below the July 2007 level but surpassed market forecasts expecting 960,000 housing starts.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 937,000 permits in July which is a decrease of 17.7 percent compared to June. July's total is 32.4 percent below the level of July 2007 and failed to meet economic forecasts expecting 970,000 permits for the month.

Housing Completions for July also fell compared to June with an annual rate of 1,035,000 privately-owned housing completions. This is a decrease of 8.7 percent compared to June and a 31.7 percent drop compared to July 2007. Single family housing completions totaled an annual rate of 791,000 in July which was a decrease of 17.2 percent from June.

US dollar falls in Forex Trading.

The U.S. dollar has lost ground today in the forex market against most of the major currencies as stocks have also retreated and crude oil has gained. The euro has increased against the dollar today from the open at approximately 1.4690 dollars per euro to trading late in the U.S. afternoon at 1.4787. The British pound has also increased verses the dollar today to trading at approximately 1.8671 pounds per dollar and showing a slight gain from the start of the week. The Japanese yen has continued its strong week verses the dollar as the USD/JPY currency pair has declined from trading above 110.50 to start the week to trading at 109.72 today. Elsewhere, the USD/CHF has fallen to 1.0913 from 1.1008, the AUD/USD has risen from 0.8681 to 0.8715 and the NZD/USD has risen from 0.7076 to 0.7134 today in forex trading action.

EUR/USD Chart - The euro gaining today against the U.S. dollar(4Hour Chart).

Forex Chart

tags: producer prices, housing starts, permits, currency trading, forex market

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