The US consumer prices rise slowed down in February. That became the catalyst of dollar falling against the basic currencies.

It became a strong argument for investors in favor of the strengthened opinion of stay of a series of the federal funds rate increase by the US Federal Reserve System, which proceeded for last 2 years. Many analytical agencies expressed their opinion that, considering inflation decline and downswing, FRS can leave rates at a former level of 4,5 % at the next FOMC meeting on March, 27th and 28th.

According to the Consumer Price Index report of Bureau of Labor statistics, U.S. Department of Labor:

Dynamics of Consumer Prices showed significant reduction - growth in February dipped to 0,1 % against growth in January - 0,7 %.

Core CPI rise, a consumer price index except for food and energy prices, showing more objective picture, also dropped to 0,1 % against January growth up to 0,2 %.

The textile goods prices were down 1 %, maximally since April 2001 after growth of 0.3 % in January as today's report showed. Food prices were up 0.1 % in February after growth of 0.5 %. The service prices were up 0.2 % the last month and up 3.9 % against the last year. The report shows that, despite a rise in prices on energy and a raw materials, industrial corporations could not provide a rise in prices their production, so, having lowered an average level of the profit.

Yesterday one more factor of pressure upon the dollar became data of Bureau of Statistics, U.S. Department of Commerce on the building market - Housing Starts and Building Permits index. Data showed cooling in the housing market that also can affect FOMC decision about rates.

Rate of Housing Starts in the USA decreased in February after growth to a 12-years top in January.

Housing Starts were down 7.9 % to its annual value of 2.12 million. In January Housing Starts grew after revision on 15.8 % up to 2.30 million. Level of Housing Starts in February was above economists’ forecasts.

Economists forecast reduction to 2.04 million vs. initial value of 2.28 million in January. In the meantime, Building Permits were down 3.2 % up to its annual value of 2.15 million in February. Housing Starts in February reduced in all regions.

Yesterday the dollar was under pressure of week labor market and Philadelphia FRB index data. Production in sector of a manufacturing industry in zone Philadelphia FRB rose less in March than in February as the report, published today, showed.

The Philadelphia FRB index of total economic situation fell from 15.4 in February to 12.3 in March. Value of the index above zero indicates to manufacturers’ share who informed on improvement of business conditions, exceeded a share of economic downturn.

Initial jobless claims were up 5,000 to 309,000 for a week on March, 11th, a maximum since December as Department of Labor informed today. Initial jobless claims grew three straight weeks. 4-week moving average of new jobless claims has was up 5,750 to 296,500, a maximum since the middle of January. Economists forecast jobless claims decline up to 300,000. Considering last growth of jobless claims, it can happen that reduction in January and February was a result of favorable weather instead of stabilization of fundamental indicators on a labor market.

Technical picture.

The euro has broken out a resistance level of 1,21075-1,2100, yesterday's fundamental data were dollar-negative that provoked break out of this resistance line.

According to the recommendation - the first short purpose 1,2140 was reached, the second purpose 1,2245 is kept, stop can be moved to input line. The euro tests strong support level of 1,2175, probably before to break out this level the euro can adjust from this level.