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New home sales fall sharply to 494K – USD extends falls

Sales of new homes fell 9.2% in January to 494K, much worse than predicted and very different to yesterday’s report about existing home sales.  New home sales in the US were expected to rise 4.4% to 544K. Also the average home sale price is down: $278K against $292K beforehand.

The US dollar, which was already off its highs, is extending the slide.

Sales of new homes are closely watched as every new construction triggers a wide array of economic activity. In addition, there is a nice correlation between the housing sector and overall economic growth.

Earlier, Markit’s preliminary services PMI for February badly disappointed by dropping into contraction territory:  a score of 49.8 instead of 53.5 expected and 53.2 seen last time.

The day began in a much better manner with the greenback enjoying solid gains. EUR/USD already fell to low support around 1.0960 but is now recovering above 1.10.

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.