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US building permits exceeded expectations and rose to an annual pace of 0.68 million. Early expectations stood on 0.63 million. This came on top of a small downward revision of last month’s pace from 0.65 to 0.64 million.

US housing starts climbed from 0.63 to 0.69 million (annualized), better than 0.64 that was expected. EUR/USD is moving higher, crossing 1.31.

This growth in building is good news but we still need to see a significant rise in existing home sales to see that the market is really moving. This figure will published tomorrow, followed by new home sales on Friday.

But all in all, the figures join other good US indicators seen recently and the chance for a double dip recession is reduced, even though one research institute still claims that this recession is coming.

Earlier in the day, Spain had a third consecutive successful auction, on the day that the new prime minister got the approval vote from the parliament.

But more than this shows hope for Rajoy’s government, it shows that banks are grabbing cheap collateral for pledging it with the ECB.

EUR/USD is capped by the 1.3145 line, after securing the break above 1.3060 earlier.

For more on the euro, see the EUR/USD forecast.

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