US Economy Update

Dollar continues to hover near record low against Euro after reportsshowing US CPI unexpectedly slowed in Aug and more than expecteddeterioration in the housing markets. Headline CPI fell -0.1% mom inAug, down from 0.1% mom in Jul and below expectation of being flat.This dragged the yoy rate further to 2.0%. Core CPI rose 0.2% mom,dragging yoy rate down to 2.1%. Housing starts decreased -2.6% to1.331, a 12 years low, while building permits decreased -5.9% to1.31m annualized rate, lowest since 95. Both are worse than market'sexpectation. USD/CAD recovers mildly from 1.0080 new 30 year lowtoday and continues to consolidate after report shows canadian CPIeased to 1.7% yoy in Aug. Still, the core CPI remained elevated at2.2%, though this was down from inflation in June and July.