By CountingPips.com
The US Dollar has continued its ascent in forex markets today as the euro’s decline against the dollar hit a fresh four-year low point. The dollar has climbed versus the euro, British pound, Australian dollar, New Zealand dollar, Canadian dollar and the Swiss franc while falling against the Japanese yen in forex trading at the end of the US
The euro-dollar currency pair (EUR/USD) has declined by over 150 pips today and fallen to trading right around the 1.2200 exchange rate. Today’s decline brought the euro to its lowest level versus the dollar since April of 2006 at the 1.2161 exchange rate. This new low surpasses even the deepest declines of the financial crisis in 2008 and puts the currency on its way to declining for a sixth straight week as the Eurozone soveriegn debt crisis has prompted traders and investors to flee the 16-nation EU currency.
The U.S. stock markets, meanwhile, decreased today with the Dow Jones down by over 114 points, the Nasdaq lower by over 36 points and the S&P 500 down by 16 points. Oil edged lower today by $0.61 to level at $69.47 per barrel while gold has gained by $10.90 to trade at the $1,210.00 per ounce level.
U.S. Economic news releases out of the U.S. today showed that producer prices edged lower unexpectedly in April after March producer inflation had increased. Producer prices decreased by 0.1 percent in the month of April after an increase of 0.7 percent in March and a 0.6 percent decrease in February. Forecasts were looking for a 0.1 percent increase in prices for April. The annual rate of increase for April showed that producer prices were 5.5 percent higher than April of 2009 after March’s annual rate registered a 6.0 percent increase.
Core producer prices, excluding food and energy prices, edged higher by 0.2 percent in April after a 0.5 percent increase in March. On an annual basis, core prices gained by 1.0 percent over the April 2009 level. Core prices surpassed forecasts expecting a 0.1 percent monthly increase and a 0.9 percent annual gain.
A separate report released today showed that U.S. building permits fell in April while housing starts and housing completions increased for the month, according to the U.S. Commerce Department. Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 606,000 permits in April which is a decrease of 11.5 percent when compared to March. Housing starts rose by 5.8 percent in April to a seasonally adjusted annual rate of 672,000 starts following an annual rate of 580,000 in March. Housing Completions for April jumped by 19.2 percent to an annual rate of 769,000 privately-owned housing completions from a rate of 645,000 completions in March.
FOREX: EUR/USD Weekly Chart – The Euro falling further this week versus the US Dollar and touching its lowest level since April 2006 under the 1.2200 exchange rate. The EUR/USD has fallen below the bearish price channel in place since November when a high above 1.5000 was reached. The EUR/USD is now down by approximately 2,100 pips from the beginning of 2010.