Tuesday's US economic docket offered the dollar its most concentrated event risk for the week; yet the otherwise volatile data would deliver few surprises for a market that is already veraciously discounting future Fed rate decisions. The morning opened with a range of data that would cover both growth and inflation trends. With futures traders considering a quarter point rate hike in September a near certainty, there an obvious interesting in the produce price index for May.
Upstream inflation pressures accelerated more quickly than expected to a 7.2 percent annualized pace that fell just short of the multi-decade high set just a few months back. Even when the 4.9 percent jump in energy costs and 0.8 percent increase in food prices were excluded, the core figure would notably match its own 16-year high. However, considering the market's focus on the cost at the pump in the grocery line and the fact that the front-line CPI numbers were released last Friday, this data added little to the mix. For growth, the session's data was not encouraging for the greenback.
The housing market - the US economy's anchor - reported an ongoing drop in construction. Housing starts slipped 3.3 percent to a 17-year low and permits for future projects fell 1.3 percent as demand sufferers from evaporating home values, ballooning inventories, rising mortgage rates and plunging consumer confidence. The business community was similarly under pressure with industrial production contracting 0.2 percent and capacity utilization edging down to a new three-and-a-half year low.
To top it off, trade activity was lending little help to expansion despite the dollar's recent record lows. The current account deficit for the first quarter ballooned more than expected to a $172.5 billion shortfall owing largely to rising fuel costs burdening the physical balance and reduced foreign investment curbing net income.
Upstream inflation pressures accelerated more quickly than expected to a 7.2 percent annualized pace that fell just short of the multi-decade high set just a few months back. Even when the 4.9 percent jump in energy costs and 0.8 percent increase in food prices were excluded, the core figure would notably match its own 16-year high. However, considering the market's focus on the cost at the pump in the grocery line and the fact that the front-line CPI numbers were released last Friday, this data added little to the mix. For growth, the session's data was not encouraging for the greenback.
The housing market - the US economy's anchor - reported an ongoing drop in construction. Housing starts slipped 3.3 percent to a 17-year low and permits for future projects fell 1.3 percent as demand sufferers from evaporating home values, ballooning inventories, rising mortgage rates and plunging consumer confidence. The business community was similarly under pressure with industrial production contracting 0.2 percent and capacity utilization edging down to a new three-and-a-half year low.
To top it off, trade activity was lending little help to expansion despite the dollar's recent record lows. The current account deficit for the first quarter ballooned more than expected to a $172.5 billion shortfall owing largely to rising fuel costs burdening the physical balance and reduced foreign investment curbing net income.