All bets were off on Thursday evening, but the week's turbulence on the fixed-income markets (tension continued after Tuesday's CPI release) paradoxically failed to produce any significant movements on the Forex market over the week: the dollar gained 0.15%, which is equivalent to stagnation... as was the case on Friday, which ended in a perfect status-quo.

The Dollar-Index remained unchanged at 104.25/104.3 (and the Euro/$ at 1.0770) after climbing +0.3% to 104.65 in the minutes following the release of the PPI: producer prices in the US rose by 0.9% in January at annual rate, whereas they were expected to rise by 0.6% (vs. +1% in December).

On a monthly basis, producer prices were up by 0.3%, against an expected rise of 0.1%.
Excluding food and energy, they rose by 0.6% on a monthly basis, compared with a consensus of +0.1% and +0.2% in December.
As was the case on Tuesday with the CPI (consumer price index), the consensus was disappointed: all the more so as the PPI is a component of the PCE index (the measure of inflation most closely followed by the Fed).

Building permits also disappointed, down -1.5% year-on-year to 1,470 million in the US.
And it got worse with housing starts, which fell by -14.8% to 1.331 million, after 1.562 million in December (versus 1.450 expected).

Building permits and housing starts continued to be penalized by high interest rates, and this is not going to get any better in February as mortgage rates rise sharply.

A small consolation is the rebound in US consumer confidence: the University of Michigan's index stands at a preliminary estimate of 79.6, compared with 79 for the previous month.

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