US Construction Permits Increase 2012.03.21

March 21, 2012 00:01

The United States (US) Department of Commerce Tuesday reported the country’s new home construction lowered 1.1% in February to a 698,000 annual rate, in line with a range of analysts’ projections. All building permits in February 2012 increased 5.1%. To add to this, January’s building permits were increased in a revision to a 717,000 annual rate from 682,000. This was the highest amount since the middle of October 2008. Building permits for single-family homes that account for 3/4ths of the housing market increased 4.9% to the annual rate of 472,000 in February from a revised January’s figure of 450,000.

In other US news, Timothy Geithner, Secretary of US Treasury provided a statement on the condition of the international finance system. Europe is a key economic partner to the US and its success in restoring monetary stability and growth is important to the success of economic recovery in the country. The US sees steps European leaders have taken serious movements in the restoration of financial stability to the area. Strategic steps that the US views as imperative to stabilization include: restructuring banking systems; improving competitiveness and growth prospects; establishing stronger disciplines on fiscal policies; a coordinated strategy to recapitalize the European financial system; and a “firewall” of funds to disperse to needing country’s during times of reform. European countries suffering who experienced the most instability have made significant improvement strides. The US is confident about progress the European region has undergone in improving financial strength over the past few months.

The EURUSD has rallied higher towards resistance at 1.3277 as European financial uncertainty subsides which also echoes comments from Geithner. We expect the EURUSD to rally higher towards the next level of resistance at 1.3325. Uncertainty continues over the supply of oil and conflict in Middle East which will keep EURUSD below 1.3325 for the time being.

Eugene Ross, Analyst

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