US pending home sales surprised with a rise of 2.1%, much better than expecte . Early expectations stood on 0.5%, after last month’s figure was also negative – a drop of 2.8%. The dollar seems unimpressed by this release, as the housing sector is still the Achilles heel of the US economy.
Last week’s new home sales were extremely bad – they stood on an annual growth of only 250K. Not only did it fall short of expectations, it also was the lowest level in many years. Also existing home sales, which are always of a higher magnitude than new home sales, posted an annual figure of 4.88 million last month, also below expectations for 5.15 million.
EUR/USD remains stable at around 1.41 after the release and GBP/USD is at 1.6022, safe above 1.60.
This release follows other better economic releases earlier in the day: personal spending rose by 0.7%, better than expected, and also got an upwards revision of last month’s figure. Personal spending and personal income didn’t exceed expectations, but they also saw the numbers of previous months get an upwards revision.
The euro and the pound managed to recover from the lows seen earlier in the day. The euro reached the support line of 1.4030 that served as a significant cushion and then recovered.
GBP/USD, that dropped under 1.60 earlier, also managed to get a boost during the New York session.
The Australian dollar fell off its new historic highs of 1.0315, but is well above the previous peak of 1.0254. It settled on higher ground.
USD/JPY rose to higher ground and isn’t making a retreat. It’s currently bound by the 81.80 line.
The key to US recovery is Non-Farm Payrolls – only better employment can give a big boost to the dollar.
