Talking Points:
- Housing starts fall back from a 5-year high
- The decline in building permits was the worst in 6 months
- USD/JPY falls about 10 pips
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The US Dollar fell about 10 pips against the Japanese Yen, as US housing starts and building permits fell back in December from 5-year highs set in November.
999 thousand excavations for residential structures were started in December, slightly better than expectations for 985 thousand housing starts and down room the 5-year high and revised 1107 thousand starts in November. New buildings permits issued in December fell 3.0% from the 5-year high and revised 1017 thousand permits issued in November, making the December decline the worst in 6-months according to the National Association of Home Builders.
Home builder broke ground on 923,400 homes in 2013, the most since 2007 and up 18.3% from the previous year. The US economy expanded by 4.1% (annualized) in Q3 of 2013, which was the fastest expansion in 7 quarters. Economic performance is important for US Dollar traders because Fed Chief Bernanke said in December that the FOMC will base its decision on when to completely end QE3 on the outcome of economic progress and the outlook for the job market.
That’s why the greenback fell slightly following the disappointing building permits release for December. At the time of this writing, USD/JPY has yet to break through a daily low at 104.19. The December 13th high at 103.92 may again provide support for the pair.
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USD/JPY 1-Minute: January 17, 2014
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .
