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USD flurry of economic data
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Tuesday, 24 February 2009 |
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There was a flurry of economic data as well as news from president Obama last week. Building permits and house starts were down to their lowest levels falling 50% from a year earlier and thanks to a stronger U.S Dollar and lower commodity prices, import prices fell negative for the sixth straight month. Added to this, industrial production contracted after manufacturers slashed output on the back of falling demand. President Obama announced a $275 billion program that will cut mortgage payments with detailed guidelines out on March 3rd.
Looking into this week’s news, on Tuesday the Conference Boards consumer confidence index for the month of February is forecasted to reach a record low of 36.0 down from 37.7. This slump in sentiment means that the recession is becoming ever deeper. Although the consumer confidence is usually a major market mover, the focus of the day will be on Federal Reserve Chairman Ben Bernanke due to testify before the Senate on the economic and Fed policy at the same time. Investors will be listening intently for more detailed outlooks on unemployment, growth and inflation. On Thursday U.S Durable Goods Orders are expected to fall 2.3% which shows that domestic demand is showing absolutely no sign of recovery with the figure failing to rise for the sixth successive month. Finally on Friday is the Q4 GDP for the U.S which is now forecasted to be lower than the initial estimate of 3.5% to a sharp 5.4% contraction the worst since Q1 1982. If a lower than expected result is shown than this will only suggest that growth will continue its depressingly downward spiral.
Data for the U.K is relatively lightweight except for Friday’s release of GDP figures but unlike the U.S the U.K forecasted figures are usually well anticipated as data on Gross Domestic Product components are available beforehand. With reserved news for Sterling and a basket of worse than expected data for the Greenback it may mean that Sterling could make some significant ground over this coming week.
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