The dollar rally came to a halt with the release of the disappointing American New Home Sales. The dollar weakened against (almost) all the currencies. Just before Christmas, the greenback is far enough from the highs it reached in recent days. Well, apart from one currency.
Existing home sales that were released yesterday, showed a nice rise: sales went up from 6.10 to 6.54 million. This nice rise exceeded expectations and supported the ongoing strength of the dollar. The final GDP release that was also published yesterday, didn’t stop the dollar.
But today’s complementary figure, new home sales, was very disappointing. Instead of edging up to 442K, it fell very sharply to 355K. This was a huge disappointment. Also last month’s nice figure of 430,000 new home sales was significantly revised to the downside: 400,000.
This hurt the dollar instantly: EUR/USD rose from 1.4280 to 1.4340. The bottom figure of 1.4215 probably won’t be tested soon. USD/JPY which struggled below 92, fell to 91.40. USD/CHF dropped below 1.04.
The kiwi, which got disappointing GDP news yesterday and fell below 0.70, is above this figure again. The story is similar with the Canadian dollar – the bad home sales saved it from its weak GDP.
But the British Pound begs to differ. Following the weak final GDP yesterday, it did not enjoy this dollar weakness. At 1.5930, it’s just 10 pips above yesterday’s bottom. While other currencies are away from the bottom, the Pound is about to dive further down.
The markets begin to close down soon for Christmas. Although there are important American releases tomorrow, it seems like the currencies will stick to the current levels with these low volumes.
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