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US New home sales jump to 468K – USD extends gains

US new home sales jump 9.6% to 468K. This is a big positive surprise that contradicts all the bad weather explanations. The  annualized number of new home sales in the US was expected to slide from 414K to 406K in January. Sales of new homes are only a small part of the real estate market, but a sale results in a lot more economic activity than one of an existing home. Good news comes also from the previous figure: January’s number was revised up to 427K.

The safe haven dollar and yen were strengthening towards the publication, mostly on events in the Ukraine. EUR/USD lost the 1.37 level, GBP/USD dropped to 1.6650 and USD/JPY is down to 102. This is a “risk off” environment. The US dollar is now stronger across the board, including against the yen.

Is the US economy economy coming out from the storm or is this an outlier? It is still hard to tell. With more bad weather in February, it is hard to say when exactly we will get “clear” data. Perhaps only data for March released in April could give straight answers. But, this will be after the FOMC meeting, which is likely announce another tapering of QE.

The bigger economic figures are scheduled later in the week, with the revision of US GDP standing out.

More:  Limited Upside For EURUSD due to Bullish Pattern On German Bunds

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.