THE TAKEAWAY: [U.S. housing starts stronger in April while building permits dipped] > [U.S. housing market stabilizing, boosting construction work] > [USDJPY mixed]
Housing starts in the U.S. increased more than expected while the approval rate of residential building permits slowed in April. According to a report released jointly today by the U.S. Consensus Bureau and the Department of Housing and Urban Development, the number of privately-owned housing starts was at a seasonally adjusted annual rate of 717,000, 2.4 percent above the upwardly revised March estimate of 699,000 (adjusted from 654,000). The median estimate of 80 economists polled by Bloomberg News had called for an increase to 685,000 starts. Housing start figures have climbed in three of the last four months, signally that the U.S. residential housing market may be stabilizing.
On the other hand, the number of privately-owned building permits in April fell to an adjusted rate of 715,000, which is 7.0 percent below the upwardly revised March rate of 769,000 (originally reported at 747,000). The consensus forecast was for a 4.5 percent drop to a rate of 730,000 new permits. Despite the larger-than-expected decline, the rate of new building permits approved has been significantly higher in the first four months of 2012 than the previous year. However, as new building permits figures are often used as a gauge of new constructions and developments in the housing markets, we could see slight moderation in construction-related work.
USDJPY 1-minute Chart: May 16, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
Following the data release, the U.S. dollar initially gained 6 bps against the yen before reversing its gains to trade lower. At the time of this report, the USDJPY pair was trading at 80.456 yen to the dollar.
--- Written by Tzu-Wen Chen, DailyFX Research
