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.
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