Dollar Holds Recent Range as New Home Sales Rise in November
THE TAKEAWAY: U.S New Home Sales Rose in Line with Estimates> Housing demand in the South and the Midwest Climbed > U.S. Dollar Holds Recent Range
Purchases of new single-family houses in the U.S. rebounded for the fourth straight month in the row in November after a hitting six-month low in August. The report jointly released today by the U.S. Census Bureau and the Department of Housing and Urban Department showed that new home sales climbed 1.6 percent at a seasonally adjusted annual rate of 315,000, matching with economists’ median projections from the Bloomberg News Survey. . A surge in housing demand in November fuels investors’ optimism over recovery in the world’s biggest economy as strength in the housing market helps boost consumer expenditure and spur demand in durable goods in coming months.
It is evident that exceptionally low rate policy paired with dropping housing prices lured new home buyers in some parts of the country. September new house sales advanced in two of four U.S. regions. Housing demand climbed 12.9 percent to 175,000 in the South and advanced 7.5 percent to 57,000 in the Midwest. In contrast, the Northeast registered a 26.3 percent drop in new house purchases to 69,000. Sales in the West also slumped 16.9 percent to 14,000. The median sales price dropped 3.8 percent to $214,100 in September while the average sales price was $243,900.
AUD/USD 1-minute Chart: December 23, 2011
Charts created using Strategy Trader– Prepared by Trang Nguyen
The U.S. dollar fell versus commodity-linked currencies in the North America trading session today amid a surge in risk appetite. At the last minute before the holiday, both the House and Senate passed a two-month payroll tax cut extension today along with further unemployment benefits for millions laid off during the U.S. recession. That means workers do not have to pay extra tax from their income, thus the bill passed will likely help encourage consumer spending and spur economic growth in the first quarter of 2012. As can be seen from the 5-minute AUDUSD chart above, the U.S. dollar resumed losses versus the aussie following the release. The currency pair hiked more than 20 pips from 1.0130 to 1.0152. However, the Relative Strength Indicator (RSI) lying between 30 and 70-level indicated neither overbought or oversold reactions regarding to the AUD/USD pair. At the time this report was written, the aussie traded at 1.0148 U.S. dollars.
--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.