The economic reports released from the US earlier today included December PPI, building permits and housing starts. The headline producer price index increased by 0.2% on a monthly basis from 1.8% in November and on an annual basis higher by 4.4% from 2.4%. The core PPI reading was flat in December compared with a 0.5% increase in November and up by 0.9% versus 1.2% a year earlier. Meanwhile, housing reports were mixed with building permits up sharply to 10.9% in December from 6.9% while housing starts declined by 4.0% compared with an 8.9% increase previously.
In the session ahead, the data slated for release will see weekly jobless claims, December leading indicators and the January Philadelphia Fed manufacturing survey. Weekly jobless claims are seen little changed, down marginally to 440k from 444k in the previous week. The January Philadelphia Fed manufacturing survey is estimated to slide to 18.0 compared with a 22.5 reading in the previous month and December leading indicators are seen slipping to 0.7% from 0.9%.
Moving the markets has been a combination of disappointing earnings from US corporations and China further preempting over heating of its economy by tightening credit conditions. Circulating across the trading desks was speculation that the Chinese government had instructed banks to rein in lending for the remainder of January in order to curb excessive growth and temper inflationary fears.
Greece Weighs on Euro
The euro tumbled to its lowest level in 5-months versus the greenback amid lingering worries over the deteriorating fiscal condition in Greece. Additionally, heightened risk aversion over possible moves from China to slow its economy dragged global equity bourses lower across the board dragged the single currency lower as well.
EURUSD trades around the 1.41-handle with support seen at 1.4060, followed by 1.4030 and 1.40. Subsequent floors are eyed at 1.3970, backed by 1.3940 and 1.39. On the topside, resistance is seen at 1.4140, backed by 1.4180 and 1.42. Additional ceilings are eyed at 1.4250 and 1.43.