US Dollar Rallies Despite Severely Disappointing June Housing Data
The perpetual calls for a bottom in the US housing market appear to be unwarranted, the most recent batch of New Home Sales data shows. June’s figures represent a pullback from a two-year high, but with a print of -8.4%, it’s clear that the street remains too bullish in its forecasts for the US housing sector. New Home Sales for June were 350K from 382K in May, below the expected 372K print, according to a Bloomberg News survey. Forecasts were looking for gains of +0.7% after gaining +6.7% in May.
EURUSD 1-minute Chart: July 25, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
In the wake of the news, unlike prior disappointing housing releases which have typically stoked hopes for more quantitative easing from the Federal Reserve, the US Dollar strengthened across the board, save the Japanese Yen, which it actually remained unchanged against. The EURUSD fell approximately 15-pips from its pre-release level while the AUDUSD from 1.0290 to as low as 1.0275.
--- Written by Christopher Vecchio, Currency Analyst
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