EUR/USD Declines Despite Good Housing News
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Dollar seems to be reacting positively to the good news from the U.S. housing market, despite the fact that improvement in the real state sector signalizes the recovery of the economy, which usually leads to the rise of the high-yielding currencies and the fall of the low-risk currencies (such as dollar). EUR/USD is now trading near 1.4103.
Housing starts reached an annual seasonally adjusted rate of 582k in June — up from 562k reported for May and above the forecasted value of 532k. Meanwhile, building permits in United States rose from 518k to 563k in June. They were expected to go up only to 524k. The problem is that the both rates are still far below their values that were reported a year ago — 46% year-to-year drop for housing starts and building permits are down by 52%.
In the given conditions decline of EUR/USD can be explained only by the fact that the market participants expect a correction today after two days of growth and that Friday is usually a bad day to ride the Forex news.
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