U.S. Pending Home Sales Worse-than-Expected; Dollar Unfazed
THE TAKEAWAY: U.S. Pending Home Sales Disappoints > Low Rates, Borrowing Costs Not Effective > USD Unchanged
The risk-on trade, as denoted by the commodity currencies and equity markets, was able to maintain its gains early in the North American session despite another round of disappointing data out of the United States. The pending home sales report for July, released today by the National Association of Realtors, showed that the number of contracts to purchase previously owned homes dropped by 1.3 percent. This was the first time the pending home sales figure dropped in three months.
According to a Bloomberg News survey, economists forecasted a 1.0 percent drop. The figure comes in below the June figure, which was up by 2.4 percent. Overall, pending home sales were up by 10.1 percent in July on a year-over-year basis, below to 13.6 percent estimate, and down from the 17.3 percent reading in June.
USD/CAD 1-minute Chart: August 29, 2011
Charts created using Strategy Trader– Prepared by Christopher Vecchio
The U.S. Dollar was mostly unfazed by the data, trading within a 10-pip band against the Euro and the Loonie within a few minutes following the release. In what has seemingly become a trend, market participants have been ignoring any negative data and have been trading off of any signs of optimism, despite how fragile or tepid the signs may actually be.
Written by Christopher Vecchio, Currency Analyst
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