THE TAKEAWAY: New home sales have biggest drop since May 2010 > Higher interest rates hurting US housing market > USDJPY BEARISH, GOLD BULLISH
The US Dollar is taking a turn lower in the first half of US trading on Friday after the worst New Home Sales report in over three years. The July housing sales report posted its worst metrics since October 2012. With the Jackson Hole Economic Policy Symposium ongoing, volatility around the US Dollar has been elevated regardless of the print; and certainly this data did little to offer support.
Here’s the data driving the US Dollar lower:
- New Home Sales (JUL): 394K (-13.4%) versus 487K (-2.0%) expected, from 455K (+3.6%) (revised lower from 497K (+8.3%)) (m/m)
GOLD (XAUUSD) 1-minute Chart: August 23, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
Following the data, the US Dollar slipped across the board, with the USDJPY tumbling from near ¥99.00 to below 98.50, at the time this report was written. However, the most interesting reaction came by precious metals, with Gold surging from $1375/oz to above 1397/oz, the highest level in August. Gold has had an outstanding run the past few weeks, gaining nearly +18% since the late-June low.
--- Written by Christopher Vecchio, Currency Analyst
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