U.S. New Home Sales Actual 356K, Expected 340K, Previous 337K
Release Explanation: The New Home Sales report is an economic indicator that measures sales of newly built homes, released by the U.S. Department of Commerce’s Census Bureau in the U.S. that includes both quantity and price statistics.
TheLFB-Forex.com Trade Desk Thoughts: New Home Sales decreased 0.6% last month, to 356K units sold, similar to the revised 358K units sold in February, numbers that were better than expected. These are important statistics since the housing market is included in most economic forecasts, and will impact retail sales, CPI, and PCE in the U.S., and the markets gets to see the real confidence of the U.S. consumer. There is a very strong impact on the sentiment towards the US Dollar from this report going forward as the equity/dollar link comes into play.
Sales of new homes were down 31% year over year, to 356k, after reaching a record 1.389 million in the summer of 2005. The 5.2% monthly decrease in inventories, the amount of homes sitting unsold exceeded the decline in sales, after the number of New Homes fell to a seasonally adjusted 311,000. The inventory rate stands at 10 months. The regional mix showed a 15% increase in the West, but a 30% drop in the Northest, elsewhere numbers were static.
Forex Technical Reaction: On the day that U.S. bank Stress Test indicators are explained, and ahead of the G7 meeting this weekend, and whilst U.S. Durable Goods order numbers are absorbed by the Wall Street cash market, these markets could literally go anywhere said TheLFB-Forex.com trade team Members.
We are only looking to get involved in these markets once direction, sentiment, and momentum is clearly in place. It looks as though the Usd may be weaker from here if equities hold the higher ground, but as yet it is not clear as to whether this will be the day that the dollar index breaks lower. Euro looked to be bullish near-term, cable looked initially the weakest today, both as a consequence of regional economic releases, but as we have already seen, both could spin on a dime on the last trading session of the week the Team said.