Dollar Up on Excellent Domestic Data

The dollar outperformed virtually all of the 16 main traded currencies as domestic reports ranging from manufacturing to housing showed better than expected numbers for the U.S. economy, boosting attractiveness for assets in the country as the economic growth accelerates. The euro erased yesterday’s gains as the EU is unlikely to fund a bailout for Greece to solve its budget deficit issues. EUR/USD is near the lowest level in 2010 and trades at 1.3608.

Building permits were at seasonally adjusted annual rate of 621k in January, showing figures below forecasts that expected 630k permits approved and from a previous reading of 653k (revised) in December. Housing starts for January were at a seasonally adjusted level of 591k from a previous revised rate of 575k in December. Forecasts expected housing starts to be at 580k.

Import and export prices published today showed an increase of 1.4% in import prices last month from a previous advance of 0.2% in December. Export prices rose 0.8 percent in January after advancing 0.6 percent in December.

Industrial production and capacity utilization rate rose in January. As industrial production increased 0.9% from a previous revised reading of 0.7% in December, utilization rate was at 72.6% from a previous revised reading of 71.6%. Forecasts were exact for the capacity utilization rate and expected industrial production to increase 0.7%.

Treasury budget report showed a deficit of $42.6 billion in January, compared to $63.5 billion in January 2009. This report came with better than expect figures as forecasts suggested the Federal budget balance to show a deficit of $44.2 billion.