- US new homes sales rise 11% in June; Mar revised higher to +2.4%
- Inventories of unsold new homes drop to 8.8 months supply from 10.2 months
- Dallas Fed manufacturing output index falls to -17.4 from -7.0
- Germany economy minister Guttenberg warns “no reason for euphoria” on signs of recovery; 2010 and 2011 to be “very difficult”
- Fed’s Plosser: Fed could raise rates before long; warns on ’70s-style inflation
- Obama/Geithner call for greater US savings, greater Chinese consumption as economic dialogue gets underway
- US equities rally late, close up 0.3% at 982.30; oil up 03% at 68.30
Currencies reached some big technical levels today but backed off without breaking into fresh territory, unable to generate the momentum one would have expected from the big jump in new home sales in the US. As I’ve written before, since housing is the sector that so damaged the economy on the way down, it’s recent signs of life are an important underpinning for a sustained recovery, if one is to take hold.
EUR/USD reached 1.4299 before easing to 1.4201 on profit-taking after failing to generate much of a spark from the housing data. It bounced from 1.4245 to 1.4270 on the data and was down to 1.42ish
An afternoon rebound was capped ahead of the 50% retracement of the days range at 1.4250.
Both USD/CAD and AUD/USD reached their range extremes today but failed to overcome the 2009 highs for the currencies. AUD stalled just pips below the 0.8263 level while USD/CAD tested 1.0780 before bouncing.
USD/JPY was firm in a 95.00/38 range in New York. Traders noted a bullish research note from Goldman Sachs today suggesting 105.00 is a fundamentally justifiable price based on USD-supportive interest rate differentials.
