Sharp Decline in US Industrial Production Sends Dollar Lower

The US Dollar ended the trading week with declines as a sharp fall in US Industrial Production underlined weak first quarter growth and sent the US Dollar lower. The North American trading session started brightly for the USD following the release of positive Empire State manufacturing index data. However, weak US industrial output and consumer sentiment data quashed risk appetite, sending investors to the safe haven precious metals market, pushing the greenback lower.

Empire State Manufacturing Index

In a report released by the Federal Reserve Bank of New York, official data showed on Friday that manufacturing activity in the State of New York increased more-than-expected in March. Empire State manufacturing activity increased to a seasonally adjusted 9.56, from 0.62 in the preceding month. This came after analysts had been expecting Empire State manufacturing activity to increase 2.21in March.

The University of Michigan Consumer Sentiment Index

In a report released by the University of Michigan, preliminary data showed on Friday that The University of Michigan Consumer Sentiment Index posted a surprise decline in March. The U.S. UoM consumer sentiment dropped to a seasonally adjusted 89.7, down from the 91.0 recorded in February. the unexpected decline came after analysts had been expecting the UoM consumer sentiment to increase to 92.0 in March.

US Industrial Production

In a report released by the Federal Reserve, official data showed on Friday that US industrial production declined more-than-expected last month. US industrial production dropped to -0.6%, from the -0.6% recorded in the preceding month whose figure was revised down from -0.5%. This came after analysts had been expecting industrial production to decline -0.1% last month.

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Daniel Simmons