Phillie Fed Index has Biggest Drop Ever
Oct 17th, 2008 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar moved higher against the euro. Late Thursday, the euro was trading at $1.3463 vs. $1.349 on Wednesday. “We expect euro/dollar to test a fresh one and a half-year low under $1.3200 and onto $1.3170 before month end,” predicted Ashraf Laidi, of CMC Markets US.
The buck held up despite some truly horrendous data rolling in.
Output from the nation’s factories, mines and utilities dropped 2.8% in September, the Fed reported. That marks the biggest decline since December 1974, and was nearly twice as bad as economists’ projections for a fall of only 1.5%.
Separately, the Philadelphia Fed’s index of manufacturing also plunged to minus 35.7 in October from reading of plus 3.8 in September. Economists surveyed by MarketWatch expected the index to dip to negative 5. It was the worst-ever drop in the Phillie gauge.
The one bright spot was that the consumer price index was unchanged in September vs. economists’ expectations for a 0.2% rise. But even that was greeted with a less than enthusiastic response.
“The moderation in inflation is a positive, but it is clear now that deflation will be a bigger worry going forward than inflation,” said Philipp Baertschi, an analyst at Sarasin.
Source: Dollar holds vs. euro despite grim data – Phillie Fed index has biggest drop ever
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