Both building permits and housing starts came out better than expected.. This data might save the dollar from a very bad week.
I’ve already written that American housing is off the bottom. Now it took one step forward. American building permits printed 690K, the best since October 2008, at the height of the crisis. This was also significantly better than the early expectations that stood on 630K. Note that also last month’s number was revised to the upside – 630K. The second figure was good as well:
Housing starts, another important indicator of the housing sector, rose to 630K, also the best since October 2008 and also beating early expectations. Both figures were published together.
Yesterday, we had disappointing unemployment claims which sent USD/JPY down on risk aversive trading, while other currencies hardly moved. Today, good American figures leave the pair unchanged – money isn’t shifted away from the “safe haven” currency – the Japanese yen.
The state of the global economy is still fragile, and this is reflected in the reactions of the forex market – the risk factor plays a big role in trading, especially on bad figures. This was seen with every small bit of news that came out of Greece, and was seen yesterday. But today, hope returned, and normal behavior with it – good American figures = dollar strength across the board
The day and the week aren’t over – we have the consumer sentiment from the University of Michigan. A high score is expected – another positive sign will probably help the dollar and will join these housing figures in an effort to save the dollar from a bad week. I hope to update on this release as well, and see if the risk factor is taking over, or if “normal” behavior will return to dominate trading.
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