EUR/USD Increases at Better Than Expected Home Sales Increase
The Takeaway: U.S. Existing Home Sales (Jan) > 4.92 versus 4.90 million expected > U.S. Transitions to a Seller’s Market > EURUSD Slightly Bullish
Existing home sales increased in every region but the West in the month of January, according to the National Association of Realtors. Total existing home sales, which include single-family homes, townhomes, condominiums, and co-ops, rose +0.4% to 4.92 million in January. The national median existing home price for all housing types was $173,600, up 12.3% from January 2012. Listed inventory is 25.3% below a year ago, while raw unsold inventory is at the lowest level since December 1999. Distressed homes, foreclosures and short sales, accounted for 23% of January sales, down from Decembers 24%. Single-family home sales increased 0.2% to a rate of 4.34 million from 4.33 million in December.
Lawrence Yun, NAR chief economist, stated “buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40% above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned to a seller’s market in much of the country.” We can expect to see a seasonal rise of inventory this spring.
Chart from FXCM Trading Station, created by Courtney Edwards
The EURUSD increased at the time of the release and was trading at 1.3211. Prior to the release, the Euro tumbled to a monthly low of 1.3166 as manufacturing and service-based activity in Europe contracted during February. It has now broken below support at 1.3310, the 38.2% retracement of its November-February rally. The US Dollar continued to strengthen during the Asian trading session following the release of the less dovish than expected FOMC minutes. The dollar index continues to rise above its 200-day moving average.
--- Written by Courtney Edwards, DailyFX Research
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