US Confidence drops in October, Housing Starts, Permits fall. Dollar falls vs. most major currencies this week. | CountingPips Forex Blog

October 17, 2008 - Forex Economic News

US Confidence drops in October, Housing Starts, Permits fall. Dollar falls vs. most major currencies this week.

Economic news out today saw further troubling economic signs for the U.S. economy as U.S. consumer confidence fell by a historical amount and housing construction data also showed declines in September.

The preliminary consumer sentiment survey by the University of Michigan and Reuters showed the biggest monthly fall on record in the October release. The consumer sentiment survey fell by 12.8 points to a 57.5 score in October after a score of 70.3 in September according to the report. The fall in consumer confidence was the largest monthly decline since the survey's inception in 1952 and surpassed market forecasts that Currency Trading data. were expecting the survey to register an approximate score of 65.0 for the month. The expectations index, which measures future economic sentiment, declined from 67.2 in September to 56.7 in October. The current conditions index, which measures current economic sentiment, declined from 75.0 in September to 58.9 in October. The 1-year inflation expectation reading increased from 4.3 in September to 4.5 in October while the 5-year expected inflation decreased to 2.8 percent from 3.0 percent in September. The final release for October will be released on October 31th.

U.S. Housing Starts, Building Permits fall, Completions rise in September.

U.S. housing starts and building permits declined in the month of September while housing completions increased according to data released by the Commerce Department on new residential construction. Housing Starts fell by 6.3 percent in August to a seasonally adjusted annual rate of 817,000. September's total is down 31.1 percent compared with September of 2007. Single-family housing starts fell by 12.0 percent compared to August. The drop in housing starts surpassed market forecasts expecting housing starts to number 872,000 in September.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 786,000 permits in September which is a decrease of 8.3 percent compared to August and a 38.4 percent drop from September of 2007. Single-family permits totaled 532,000 which was 3.8 percent less than August's permit totals. The drop in building permits also surpassed market forecasts expecting permits to number 840,000 in September.

Housing Completions for Septemver increased when compared to August as completions rose to an annual rate of 982,000 privately-owned housing completions. This is an increase of 11.7 percent when compared to August's completion totals and 20.4 percent below the September 2007 level.

Eurozone News - Eurozone shows deficit in August.

The major news out of the Eurozone today showed that the Eurozone's international trade balance turned in a deficit in August according to a data release from Eurostat today. The eurozone's 15 countries that use the euro currency showed a trade deficit of 9.3 billion euros in August after a deficit of 2.0 billion euros in July. August's deficit also fell compared to August 2007 which had showed a surplus of 1.5 billion euros. The deficit surpassed market expectations as market forecasts had expected a deficit of 5.5 billion euros for the month. Eurozone seasonally adjusted imports and exports decreased by 1.0 percent and 0.6 percent in the month of August, respectively.

The trade deficit for all of the 27 nations(EU27) in the European Union also increased in August. The EU27 posted a deficit of 27.2 billion euros after a deficit of 21.5 billion euros in July. August's deficit was 11.1 billion euros wider than the deficit of 16.1 billion euros in August of 2007. In seasonally adjusted terms, August's EU27 exports declined by 2.3 percent while imports also declined by 2.3 percent.

Forex Markets - US Dollar mixed in trading.

The U.S. dollar is finishing up the week in mixed fashion as the American currency has been up and down today but the market has not seen any real big moves against the major currencies. The dollar has gained slightly verses the euro, pound, yen, Canadian dollar and New Zealand dollar while falling against the Swiss franc and Australian dollar in the afternoon of the U.S. trading session at 2:44pm ET.

EUR/USD

The EUR/USD pair has declined slightly from today's opening rate of 1.3464 dollars per euro to trading at 1.3425 in the US trading session just after 2:45 pm ET. The EUR/USD, at the time of writing, is approximately 25-30 pips above the weeks opening rate and looking to reverse two consecutive declining weeks.

GBP/USD

The GBP/USD has declined from opening at 1.7334 to trading today at 1.7319 dollars per pound. The GBP/USD is on pace to close the week higher after two consecutive declining weeks.

USD/JPY

The USD/JPY has gained in today's trading at the exchange rate of 101.58 after opening at 101.41 yen per dollar earlier today. The USD/JPY has increased this week after four consecutive weeks of decline.

USD/CAD

The dollar has gained against the Canadian loonie today after falling yesterday as the USD/CAD has advanced from today's 1.1794 open to trading at the exchange rate of 1.1841. The USD/CAD, on a weekly basis, has gained this week and is looking to close higher for the third consecutive week.

USD/CHF

The dollar has declined against the Swiss franc today as the USD/CHF has declined from 1.1373 to 1.1339. The USD/CHF is declining for the week after two consecutive gaining weeks.

AUD/USD

The dollar has declined very slightly against the Australian Aussie as the AUD/USD is trading at 0.6950 today after opening at 0.6939. On a weekly basis, the AUD/USD will end the week positively and reversing three consecutive weeks of decline.

NZD/USD

The New Zealand kiwi has declined slightly against the U.S. dollar. The NZD/USD has fallen to the 0.6154 level today after opening at 0.6178. The NZD/USD has gained for the week and also is reversing three consecutive weeks of decline.

USD/JPY Chart - The US dollar showing a gain today against the Japanese yen in forex trading(Daily Chart). The USD/JPY pair has increased this week after falling for four consecutive weeks.

Today's Forex Chart