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Video for April 16th, 2008 (3 min 12 sec): EUR/USD Sets New Record on CPI Data; Loonie Gains Sharply on Rising Oil EUR Annual CPI up to 3.6% In March , the Eurozone consumer inflation was at 3.6% on the year, and 1.0% on the month. Both figures exceeded forecasts, and the annual rate is at a 16-year high. As Trichet had correctly assessed, "second-round" inflation appears to be lingering, which justifies the ECB's decision to hold rates last week. US CPI Up 0.3% in March For the Month, Core Increases 0.2% US consumers paid 0.3% more in March than February for the same basket of goods. Core prices rose 0.2%. Both figures were in-line with expectations. Energy prices jumped close to 2% and was the main driver of inflation. Core items were also higher as producers passed on higher raw materials costs to consumers. US Housing Shows Another Sad Round, Starts Slide 11.9% and Permits Down It was another poor month for the housing sector as housing starts plunged 11.9% to an annual pace of 950K- - the slowest in 17 years. Construction on new homes continues to falter as foreclosures add extra supply to unsold homes. Permits, a leading indicator for future starts, fell 5.8% to an annual pace of 930K. EUR/USD - New All Time High Set
The EUR/USD pair tore through its record high near 1.59 set last week. Today the pair reached 1.5968 following the higher than expected European inflation report. It hovered around this high as poor housing data came out for the US in NY trading. GBP/USD - Pound Rallies 170 Pips vs Dollar Overnight
The Pound-Dollar pair climbed 170 pips during European trading, and set a session high slightly above 1.98. Then the pair pulled back more than 50 pips during NY trading in spite of the weak US housing data. GBP/USD Daily - Volatile Trading, but Pound Forming Down Trending Wedge
In the bigger picture, the pair is trading in a down-trending wedge. It has been very volatile so far this week as the pair jumped from support to resistance, back to support. Overnight, the pair climbed sharply from the support, but retreated 50 pips after hitting resistance. EUR/GBP - Euro Gaining on Pound on Outlook for Interest Rates
While the euro was able to retain its gains on the dollar, the Sterling struggled as it is in a downtrend against the dollar. Widening growth spread, and interest rate spread for the two economies are reflected by the appreciation of the euro relative to the sterling. The eur-gbp pair gained 50 pips post euro-zone CPI release, and has climbed 130 pips since starting this week with a large price gap. US Mar Industrial Production Positive at 0.3%, Decline Was Forecasted The Dollar found some support after industrial production data came in better than expected about 45 minutes after the other US releases. Production was up 0.3%, surprising forecasts of a decline. The increase still only goes about halfway to mitigate the decline from February. USD/JPY - US Stock Gains Help Dollar Pare Earlier Losses to Yen
US stocks were not worried about the Dollar's poor performance overnight and stock indexes opened up higher on upbeat results from Intel and JP Morgan Chase. The solid start helped the Dollar pare some of its overnight losses to the Yen. CAN Manufacturing Shipments Increase 1.6%, Beats Expectations In Canada, manufacturing shipments rose 1.6%, beating expectations. It was the second increase after a weak December in which shipments declined 3.7%. The auto-industry bounced back in February and was a big factor in the stronger figures. USD/CAD - Loonie Has Huge Day vs US Dollar on New Record in Oil Prices
The Loonie was on a tear today against the greenback, surging about 160 pips from its overnight lows. A new record for oil prices and general Dollar weakness this session helped propel the pair close to parity. This week's three sessions have wiped out the pair's gains from last week. Upcoming Releases Overnight, Japan will release industrial production data, and Switzerland unveils data on retail sales and economic expectations. The euro-zone meanwhile will post trade balance data. Tomorrow Canada reveals its consumer prices, and the US will post its weekly jobless claims, the Philly Fed index, and an index of leading indicators. |
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