The US building activity is worryingly on the back foot at the moment. The data published some minutes ago saw growth of the Housing Starts for July by just 0.9% against the expected 7.4%, all after seeing a big dip by 12.9% in the month before. The building activity is a useful indicator of the housing market and often reflects the consumers’ confidence in economic expectations. Sudden weak data put some pressure on the Dollar, allowing EURUSD to continue its second day recovery, after initially having been sent to 1.1390 after the report’s publication.
Among other news: Weekly initial claims were slightly better than expected. But many market observers have grown accustomed to the indicators that ply around at their lowest in the last 40 years. This fact is ignored by the markets as long as there are too few signs that the tight labour market causes the increase of the inflationary pressure. So far, inflation is effected much more by the dynamics of the energy prices and the dollar rate.