Dollar weakens on Housing Data
The US Dollar has started the week under pressure following weaker than expected New Home Sales figures for February. The Dollar had received a boost towards the end of last week when Existing Home Sales figures came in above consensus. The mixed housing data only adds to the confusion surrounding the state of the US economy which we highlighted in yesterday’s posting.
Many analysts had predicted an increase in sales of new homes, especially in light of the encouraging release last Friday and the warmer weather setting in. The general opinion was for a rise of about 3.5% to 970,000.
Economists were therefore shocked to see the figure come in at just 848,000, a fall of nearly 4% and the weakest performance in this sector for nearly 7 years. Compounding the misery was the year-on-year picture – data from February 2006 was 18.3% stronger – and the downward revision by 170,000 of the previous 3 month’s numbers.
The Dollar was understandably sold off in the aftermath of the report. Sterling briefly rose over the 1.97 mark and the Euro surged three-quarters of a cent to settle in a new range around 1.3330.
The Buck, given the mixed signals about whether the Federal Reserve’s next move in interest rates will be up or down, was hardly in a position to absorb such shocks. The negative sentiment surrounding the currency now leaves it vulnerable to releases later in the week, notably today’s Consumer Confidence report (a fall to an index figure of around 105 from last month’s 112.5) at 3pm and Friday’s Chicago PMI (Purchasing Managers Index).
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Many analysts had predicted an increase in sales of new homes, especially in light of the encouraging release last Friday and the warmer weather setting in. The general opinion was for a rise of about 3.5% to 970,000.
Economists were therefore shocked to see the figure come in at just 848,000, a fall of nearly 4% and the weakest performance in this sector for nearly 7 years. Compounding the misery was the year-on-year picture – data from February 2006 was 18.3% stronger – and the downward revision by 170,000 of the previous 3 month’s numbers.
The Dollar was understandably sold off in the aftermath of the report. Sterling briefly rose over the 1.97 mark and the Euro surged three-quarters of a cent to settle in a new range around 1.3330.
The Buck, given the mixed signals about whether the Federal Reserve’s next move in interest rates will be up or down, was hardly in a position to absorb such shocks. The negative sentiment surrounding the currency now leaves it vulnerable to releases later in the week, notably today’s Consumer Confidence report (a fall to an index figure of around 105 from last month’s 112.5) at 3pm and Friday’s Chicago PMI (Purchasing Managers Index).
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: New Home Sales, US Dollar
posted by Wise Money @ 1:31 PM
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