THE TAKEAWAY: U.S. Existing-Home Sales Disappoint > Labor Market, Foreclosures Weighing > U.S. Dollar Bearish
U.S. existing-home sales fell in June, surprising the market, as a deteriorating labor market coupled with an increase in foreclosures has continued to weigh on the housing sector. Existing-home sales were up by 4.77 million in June, below the 4.90 million forecast, as well as below May’s 4.81 million sales. Overall, sales were down 0.8 percent from the previous month, below the 1.9 percent estimated gain, according to a Bloomberg News survey.
Euro-Dollar 1-minute Chart: July 20, 2011
Charts created using Strategy Trader– Prepared by Christopher Vecchio
Foreclosures and stricter lending rules are harming the housing sector, as, when coupled with increasing unemployment, it appears that it could take years to reduce the number of distressed properties on the market, as inventories are slightly increasing. The market has improved slightly, though, as existing-home sales have fallen since reaching an annual peak of 7.08 million six years ago.
U.S. Existing-Home Sales: July 2008 to Present
Following the release, the Dow Jones FXCM Dollar Index fell briefly on the data release, dropping from 9566.72 at 14:00 GMT to as low as 9555.94. However, the index quickly regained its losses, as risk-appetite continued to wane, with the index crawling back to 9563.71 at the time this report was written. The index remains well-off of its session open at 9575.28, and its session high at 9588.41.
Written by Christopher Vecchio, Currency Analyst
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