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The annual level of existing home sales dropped to 4.62 million, below market expectations. It was expected to drop in January to 4.73 million from 4.87 million in January (before revisions). This is a drop of 5.1% from December.

Before the publication, EUR/USD was on the rise around 1.3740. GBP/USD was hanging around 1.6675 and USD/JPY was steady on high ground, at 102.70. The dollar is a bit lower now: USD/JPY is shying away from 102.70, EUR/USD is extending its gains and GBP/USD is above 1.67.

The majority of the housing market is of existing (second hand) homes. However, sales of new homes trigger more economic activity in infrastructure, buying of furniture, etc.

While inflation and jobless came out OK in the US, housing data released this week was bad, and the Philly Fed Index was a disaster in comparison to early expectations. Better than expected numbers were pretty hard to find.

However, the economic disappointments are not likely to derail the taper train, as the FOMC minutes have shown.

The big US release next week is the second estimate of GDP. Check out next week’s events in the forex weekly outlook.