Looking at the breakdown of the report, new orders scaled back to 58.5 from 65.7 in May, while inventories rose to 45.8 in June from 45.6 the previous month. New orders are well off of its peak of 65.9, a signal of lower demand and production this quarter. Also weighing on the greenback was pending home sales taking a free fall of 30.0 percent for the month of May after rising 6.0 percent in April. The drop in home sales marks the largest on record and sends the national index to its lowest level since January 2001 as the homebuyer tax credit recently came to an end. Going forward, the outlook for home sales remains blurry as uncertainty in the labor market lingers. Tomorrow’s Non-Farm payrolls release will give us some insight regarding the current state of employment in world’s largest economy. While economists are expecting payrolls to decline 115K as census employment unwinds, traders should not overlook private payrolls figures as the index is forecasted to jump 100K.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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