The number of home sales in the US fell to an annual level of 394K, much worse than 487K expected and even further off from the previous number of 455K, after revisions. The original number was 497K. So, we have an awful figure and a significant downwards revision of the previous number.
EUR/USD was trading at 1.3350 and is now higher, at 1.3370. USD/JPY is now heading lower, lowing the 99 line and trading at 98.80. — updates coming
The drop reflects a 13.4% dive, which is even higher if we look at the original print. It will be interesting to hear an explanation about this figure. While sales do experience volatility, this is a huge drop.
GBP/USD enjoyed a rise after the positive GDP number and then fell. The US data helps it recover to 1.5560.
Update: It takes time, but the dollar extends its falls, with EUR/USD moving up towards 1.34, USD/JPY falling to 98.50 and AUD/USD climbing back – all on the back of the terrible home sales.
The horrible number casts a shadow over QE tapering in September, after there was already a growing notion about the move, especially after the FOMC Meeting Minutes.
Further reading: Economic Fundamentals and Geo-political concerns should boost the US dollar from recent weakness
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