Today’s main news events are both from the United States. Following the recent wave of negative U.S. news, investors are eager to see whether today’s indicators will generate momentum for the global economic recovery.
Here is a roundup of the day’s main events.
Housing Starts/Building Permits – USD – 12:30 GMT
The housing market remains one of the major drivers behind the economic recovery and as such, is one of the major economic indicators in the U.S. economy. The indicators measure the number of new building permits issued and new buildings under construction respectively. After the expiration of the housing credits last month, all housing related numbers have dropped and have proven to be very volatile publications. Any number below expectations will likely boost the USD as investors will shy away from riskier currencies in favor of the safe haven greenback.
FOMC Statement – USD – 18:15
The FOMC statement tends to generate great anticipation and market volatility. Today’s meeting is particularly interesting as the recent wave of negative economic data has fueled speculations that the Fed will resume its asset purchases program, known as quantitative easing. This puts pressure on the USD since continuation of the program will basically mean pumping more dollars into the economy, a step that typically weakens the greenback. Whether or not the Fed will resume quantitative easing is yet to be seen, but the recent stagnation in the U.S. economic recovery does require some action and investors are eagerly awaiting news of the meeting minutes.
Investors will be following closely for any clues of future monetary policy moves by the Fed as well as their assessment of the strength of the U.S economic recovery.
