The US Dollar surged in today’s trading, buoyed by the release of strong US economic data.
US Construction Spending
Construction spending in the US increased more than expected in November, hitting its highest level in nearly 11 years. The Commerce Department reported on Tuesday that construction spending rose to $1.18 trillion, up 0.9%, making it the highest level since April 2006. The surge in spending was down to increases in both private and public sector investment. The figures are keenly watched as they provide a strong indicator as to the future health of the economy. Today’s surprise numbers were well received as they could provide a much needed boost to fourth-quarter economic growth.
October’s construction spending was revised up from the previously reported 0.5 percent increase to 0.6 percent rise. Meanwhile, on a yearly basis, construction spending rose 4.1 percent in November. Analysts had forecast construction spending to increase 0.6 percent in November. The 0.9% increase may prompt analysts to increase their gross domestic product estimates for the final quarter of the year.
November’s spending on private construction projects increased 1.0 percent to its highest level since July 2006. Both single-family home building and home renovations rose. Investment in private nonresidential structures, including hospitals, factories and roads, increased 0.9 percent. the surprise increase follows a decline of 1.5 percent in October.
Spending on public construction spending in November rose 0.8 percent to it’s highest level since March 2016. November’s increase makes it four consecutive months of gains. Spending on State and local government construction increased 0.6 percent in November, also making it four consecutive months of gains. Meanwhile, providing the biggest surprise was Federal government construction spending which leapt 3.1 percent after posting a 0.2 percent gain in October.
Dollar Surge
The strong data from the US helped the US Dollar make big gains in Tuesday’s trading. Despite a large round of profit taking keeping gains in check, the US Dollar was higher against most major currencies. The US Dollar index which tracks the greenback against a basket of six weighted currencies ,was up 0.77% at time of writing, having risen 1.27% earlier in the session.
