Dollar Flat Despite US Pending Home Sales Rose in March
THE TAKEAWAY: [US Pending Home Sales rose 1.1% monthly; increased 5.8% yearly ] > [Rising household income and pickup in jobs support housing demand] > [USD/CAD Mixed]
The number of signed contracts to purchase previously owned homes in the U.S. increased in March, adding more signals to the housing market recovery. The National Association of Realtors reported today that its pending home sales index, a forward-looking indicator based on contract signings, climbed by 1.5 percent, following a 1.0 percent drop in February that was downwardly revised from negative 0.4 percent initially reported. The median forecast of 34 economists surveyed by Bloomberg News had projected a 1.0 percent rise in the Index. On a yearly basis, pending home sales rose 5.8 percent in March, well below the expectation for an 6.1 percent increase.
In specific, three of four regions showed increase in pending home sales from a month earlier. Contracts signings climbed by 2.7 percent in the South and 1.5 percent in the West. They were unchanged in the Northeast.
Record-low lending rates, higher home values and pickup in the labor market help boost the demand in housing sector. As builders and home owners are responding to the demand and make more homes available in the market, a limited supply of dwellings would be alleviated and therefore fuel stronger growth in real estate.
Chart created using Marketscope 2.0 – Prepared by Renee Mu
Despite the Pending Home Sales climbed in March, the yearly reading fell short of expectation. As a result, the U.S. dollar changed little against the Canadian currency following the data release. At the time of this report written, the USDCAD was trading at C$1.0144.
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--- Written by Renee Mu DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.