US building permits dropped 3.8% to 918K. They were expected to stand at 950K. . Housing starts actually rose to 819K, but this is due to a downwards revision of last month’s number from 0.90 to 0.88 million. A level of 930K was expected. These are the last figures before the all-important Fed decision later today. They are unexpected to have an impact on the decision in the meeting that already began yesterday. However, they do have some impact on the markets.
EUR/USD was ticking lower in a very narrow range, and traded just under 1.3350. It is now above this level. USD/JPY was around 99 and is now sliding towards 98.92
Update:
- The Fed did NOT announce tapering, dollar crashes
- Live blog of Ben Bernanke’s press conference
There is a lot of tension in the markets towards the decision. There are good chances that the Fed will announce a reduction of 10 to 15 billion dollars in monthly bond buys.
The reaction is likely to be different in various currencies. See the full preview:Â QE Tapering Preview: 5 Reasons, 6 Scenarios and 7 Potential Currency Reactions
