- Paul Dales from Capital Economics
The greenback continued its appreciation versus the single currency on Friday, adding 0.16% at the time of writing, as together with dovish comments from the ECB, the world's largest economy provided an optimistic view on the housing market, pushing the greenback higher. At the beginning of May Janet Yellen expressed one cautionary note, saying that readings on housing activity have remained disappointing so far during the year. The economy itself is on the right track, with only property market lagging behind.
Friday's report from the Commerce Department showed groundbreaking soared 13.2% to a seasonally adjusted annual pace of 1.07 million units in April, hitting the highest since November 2013. Analysts expected starts rising only to a 980,000-unit mark over the observed period. Additionally, starts advanced 2.0%, while companies took additional 8% of building permits and the important single-family segments posting a solid 0.8% increase in housing starts. The only worrying sign was a drop in the level of confidence among single-family home builders, with the corresponding gauge reaching a one-year low in May. Earlier this year the key housing market has stalled due to a combination of higher mortgage rates and soaring property prices, contrasting with a backdrop of stagnant wage growth, making the housing less affordable for Americans. At the same time, cold winter also weighed on activity in the sector.
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