The U.S. Dollar soared to hit an 11 month high against other major currencies this morning, after the U.S. Commerce Department released positive Building Permits and Housing Starts numbers.
Building Permits increased +8.1 percent to 1.052 million units, versus June’s number of only 973,000 units. Market analysts had only expected a +2.5% rise in July to 1.0 million units.
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Also released in the report was Housing Starts data, which showed a +15.7% increase, with 1.093 million units started in July versus the only 945,000 units started in June. This favorable Housing Starts result also considerably exceeded the market analysts’ consensus estimate of an only +8.6% increase to 969,000 units started.
The surge in Housing Starts showed starts of single-family homes increased by +8.3% last month to 656,000 units, while multi-family home starts jumped by +33% to 423,000 units, the highest increase seen since January of 2006.
Analysts felt that the notable rise in Housing Starts and Building Permits could signal a turnaround in the U.S. housing market, which would in turn lend considerable support to the U.S. Dollar going forward.
The U.S. Dollar reacted quickly to the good news for the U.S. housing market by rising sharply against the other major currencies. After closing yesterday at 81.576, the U.S. Dollar Index rose as far as 81.835 in the wake of the positive housing data’s release. This new recent high seen in the U.S. Dollar Index today was the highest the index had printed since the middle of September of last year.Get the 5 most predictable currency pairs