FX.co ★ Fundamental Analysis, February 17, 2011

According to protocol of the Fedral Bank’s (FOMC) last meeting held last month and published yesterday, the Federal Reserve has revised its growth forecast for the US economy's performance this year, its leaders expressing confidence that the great economic recovery in the world is accelerating. The bank raised the forecast for economic growth in 2011 to a level of 3.4% – 3.9% of the US Gross Domestic Product (GDP).

On the American macroeconomic front, the United States Department of Commerce reported last night that the amount of new construction projects rose in January 14.6% to an annual rate of 596 thousand houses, the highest rate in 20 months, whereas economists predicted a more moderate growth to an annual rate of 539 thousand new construction projects.

The United States Department of Commerce further reported that the US Producer Price Index (PPI) rose in January 0.8%, a seventh monthly rise in a row, following the rise in energy prices. Economists had forecasted a 0.9% rise. The core index, which excludes energy prices, had risen 0.5% – the sharpest rise since October 2008, higher than the economist’s forecasts of a 0.3% rise.

Also in the macroeconomic sphere, US industrial production declined in January by 0.1% following a 1.2% rise in December. The analysts forecasted a 0.5% rise in production following a rise of 0.8% which was originally reported in December. Production capacity use declined last month to 76.1% compared with December's 76.2%, and is still lower than the average level of 80% over the past 20 years.