New York Session – May 17, 2011 4:02 PM

The greenback was weaker against its counterparts with the exception of the Japanese yen as economic data weighed on the outlook for the U.S. economy.  U.S. economic data released today disappointed investors as housing and manufacturing data came in below expectations. In the housing market, April building permits declined by -4.0% m/m to 551K from the previous 574K (cons. 590K) and April housing starts unexpectedly dropped -10.6% m/m to 523K from the prior 585K (cons. 569K). Industrial production for the month of April was expected at +0.4% however came in at 0.0% (prior 0.7%). Capacity utilization surprisingly fell from the previous 77.0% to 76.9% in April (cons. 77.6%). The negative data had investors concerned about the strength of the recovery which sent risk sentiment lower. The dollar declined against all of the G10 currencies except the yen which remained on the backfoot following comments from BOJ Governor Shirakawa in which he noted that the Japanese economy is in a “very severe” state. USD/JPY climbed higher to current levels of around 81.40. Full text »

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