The Dollar is Steady Despite Robust Home Sales
The dollar traded in a very tight range against the Yen on Wednesday as risk aversion in the US equity markets failed to spill over into the Forex market. Stronger than expected US homes sales on the back of Monday’s better than expected existing home sales slightly lifted US rates which did not convert into a stronger greenback.
U.S. new home sales surged 18.6% to a 504k annual rate in May versus 425k in April. March’s 407k reading was revised up to 410k. The result is the highest reading since May 2008. Sales were up in all four regions, with strength mostly from the West and Northeast. The months’ supply of homes dropped to 4.5 from 5.3. There were 189k homes on the market, the same as in April. The median sales price rose 4.6% to $282,000 in May from $269,700, which was revised down from $275,800. This was up 6.9% y/y versus -3.4% previously.
In the manufacturing space the U.S. Richmond Fed index dipped to 3 in June from 7 in both April and May. The report was a little bigger decline than expected. The employment component slipped to 3 after jumping 6 points to 10 in May. The workweek rose to 7 from 3. Wages were nearly halved to 12 from 22. New order volume edged up to 4 from 3. The 6-month business activity shipment index rose to 20 form 17, with employment dipping to 10 from 12, and new orders rising to 26 from 22.
The USDJPY traded in a very tight range Wednesday, close to 101.90 hovering near the 10-day moving average. The MACD is flat near the zero index level reflecting little momentum, while the RSI is printing near 48, which is in the middle of the neutral range.
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