Construction spending rose 0.8% as well, better than expected.
The dollar is falling on reduced risk aversion, but at some point this has to reverse. The market is pricing in very large deficits but should the economy recover sufficiently, the deficits may not be as wide as expected if revenues improve. That’s a big if, but has to be thought about.
Eventually good news for the US economy will be good news for the dollar. It is all in the timing.
EUR/USD is at 1.4218, while USD/JPY is at 95.95.