THE TAKEAWAY: [US new home sales unexpected declined in October] > [Showing limited progress in housing market recovery] > [USD/JPY Weakens]
Sales of new single-family homes in the U.S. dropped 0.3% to 368,000 in October according to the estimates released jointly by the U.S. Consensus Bureau and the Department of Housing and Urban Development. The median forecast of economists surveyed by Bloomberg News had projected a 0.3% increase to 390,000 in October. September’s figures were revised downwards to a 0.8 percent increase to 369,000, from the initial figures of a 5.7 percent gain to 389,000.
Purchases fell in two of four regions last month. In the Northeast, home purchases dropped 32.3 percent due to a ‘minimal’ effect on the data from superstorm Sandy according to the Commerce Department. Sale in the south fell 11.8 percent to 14,000 the same level as in August. The lower sales at the end of the year add to signs of limited progress in the housing market. At the same time, tight lending standards may prevent a bigger recovery in the market.
USD/JPY 1-minute Chart: November 28, 2012
In the minutes following the data release, the U.S. dollar dropped against the major currencies, falling 6 pips against the Japanese Yen to 81.75. However, as markets corrected, the greenback quickly pared most of its losses, though it remained at lower levels than those seen prior to the data release. At the time of this report, the USD/JPY was trading at 81.77.