The annualized number of new home sales in the US in June rose to 497K. It was expected to tick up to 482K from 459K. The figure for May was revised to the downside, from 476K. While also June’s figure could be revised to the downside, the initial number is very strong and certainly encouraging after a streak of weak housing numbers. This is the strongest figure in 5 years.
EUR/USD was trading above 1.32, but off the highs for the day. USD/JPY moved higher above 100 to 100.20, continuing its dance with the very round number. The dollar is now moving higher. EUR/USD made a dip to 1.32 and USD/JPY is advancing to 100.40, extending its gains. AUD/USD is now falling below 0.92.
Every sale of a new home creates a wide array of economic activity around it, making this figure important, even though most of the market is in existing (second hand) homes.
On Monday, the US released its existing home sales for June, and it disappointed with a drop to 5.08 million (annualized). This drop, even though it wasn’t a shocking surprise, sent the USD tumbling down across the board.
Earlier, Markit reported its preliminary manufacturing PMI for the US and it came out better than expected: 53.2 instead of 52.5 expected and 51.9 in June. Also the all-important employment component was revised to the upside.
Further reading: Video: Where next for EUR/USD, EUR/GBP, GBP/USD, AUD/USD and USD/CAD