Talking Points:
- USD New Home Sales for June came in at -6.8% m/m vs. 0.3% m/m estimated.
- Total June New Home Sales had a +482K read vs +548K estimate
- USDJPY slips on the back of housing data release.
USD New Home Sales reported a -6.8% drop on a month-by-month basis, considerably missing surveyed expectations of 0.3% by Bloomberg News. The data was also revised downward from a +2.2% m/m clip in May to -1.1% m/m. Overall, total New Home Sales also missed showing a +482K data print compared to a +548K survey. The previous figure from May was downward revised to +517K, showing a -35K decline.
The US Dollar weakened broadly against its major counter parts, with the USDJPY in particular dropping on the back of the data release. The pair found support during the Asia session near ¥123.80, and had climbed since. Immediate reaction from the housing data showed -11-pip decrease in the 1-minute candlestick at 14:00 GMT. At the time this report was written, the pair was trading at ¥123.87.
USD New Home Sales reports the sale of newly constructed residences in the United States. The data reflects consumer confidence in the housing market – an important aspect of the US economy. A contracting USD New Home Sales figure indicates a deteriorating economic outlook. Market participants consider new home sales to be a semi-significant market mover.
Earlier in the week, the other US housing data was released: Existing Home Sales and the House Price Index. Both reports were fairly strong, which is why today’s figures are particularly disappointing. Here is a summary of July 22 housing data:
Read more: USDOLLAR Index Fights Back to Trendline from June Lows
--- Written by Christopher Vecchio, Currency Strategist and Yash Gandhi, DailyFX Research
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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