US equity markets turned sour overnight as a host of economic indicators failed to meet up to the positive tones by analysts, overshadowing the better than expected earnings from US Companies. Risk-plays saw the greenback post mild gains as investors pondered just how slow and protracted the economic recovery will be, with major counterparts losing ground.
Housing Starts for September rose to 590,000 slightly higher than the August downwardly revised figure of 587,000, however the market found little comfort as the rate fell short of the 610,000 consensus. Building Permits for September also failed to meet expectation recording a rise of 573,000 against analyst expectation of 595,000.
The Producer Price Index for September also fell a seasonal adjusted 0.6 percent, economist had predicated no change.
The Canadian dollar is one step further away from greenback parity, as The Bank of Canada warned the strength of the CAD will more than fully offset economic growth in the local economy.
The central bank held interest rates at 0.25 percent today with the currency losing ground as investors took heed to the central banks comments. Canada's currency has grown rapidly in recent times on speculation they will follow Australia's lead and raise interest rates.
Yesterday we saw the Aussie dollar break US$.9300 guided by the release of the minutes for the October RBA meeting. In the ensuing minutes of the release the Aussie pushed through US$.9300 with little hesitation. Stops triggered around the key US$93 cent resistance levels which created a short burst in price action to reach highs of US$.9311.
Although the minutes echoed the bullish stance we have seen by RBA officials in the recent weeks, the Aussies momentum was short lived with a swift retracement. The Aussie has re-gained composure since the RBA minutes induced volatility which saw it retreat two big figures overnight to lows of US$.9180. At the time of writing the local currency is buying US$.9240.