US Dollar to Pound (USD/GBP) at one-month high on positive inflation and building permit data

USD to GBP traded at its highest level in a month on Tuesday after inflation and building permit data came in positively.

The US Dollar also found support from an increase in investor sentiment which came after a speech by Russian President Vladimir Putin. Sentiment recovered after President Putin said that Russia isn’t seeking “a partition of Ukraine”, signalling that Russia’s moves in Ukraine would be limited. The speech followed the weekends vote in the Crimea, which saw a majority of voters chose for the region to join the Russian Federation and break away from Ukraine.

Inflation in the USA was little changed in February according to a report released by the Washington based Labour Department. The consumer price index increased by 0.1%, equalling the rise recorded in January and matched economist forecasts. On a yearly basis, inflation advanced by 1.1%, short of the 1.6% forecast by economists.

A separate report showed that the number of building permits issued in the world’s largest economy rose more than expected to a four month high. According to the Commerce Department the number of building permits issued last month soared by 7.7% to a seasonally adjusted figure of 1.018 million units, beating January’s figure of 945,000. The data also suggests that the US economy is shrugging off the impacts of the exceptionally cold winter months.

Further gains were checked however after data showed that U.S. housing starts fell 0.2% last month to hit a seasonally adjusted 907,000 units, disappointing expectations for an increase of 3.4% to 910,000 units.

The US Dollar will experience volatility on Wednesday due to the release of the latest Federal Reserve policy meeting and interest rate decision. All eyes will be focused on whether the Central Bank will announce a further tapering of its quantitative easing programme. If a further reduction is announced then we can expect the Dollar to gain in strength.

Sterling meanwhile is likely to see movement due to tomorrow’s unemployment and the release of the Monetary Policy Committee meeting minutes.

US Dollar (USD) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,,Pound Sterling,0.6027 ,
US Dollar,,Euro,0.7192 ,
US Dollar,,Canadian Dollar,1.1052 ,
US Dollar,,Australian Dollar,1.0961 ,
Pound Sterling,,US Dollar,1.6584,

[/table]