GBPUSD, H1
US housing starts climbed 22.6% in July to a hefty 1.496 mln pace, much stronger than expected, after the 17.5% June surge to 1.220 mln (was 1.186 mln). This is the biggest jump since October 2016 and is a third straight monthly pick up, correcting from the three months of COVID declines from February. Starts were at a 14-year high of 1.617 mln at the start of the year, while April’s 0.934 mln was the lowest since February 2015. Most of the strength was in the multifamily sector where starts popped 58.4% to 0.556 mln after the 13.2% jump to 0.351 mln (was 0.355 mln). Single family starts were up 8.2% to 0.940 mln following June’s 19.4% surge to 0.869 mln (was 0.831 mln). Building permits jumped 18.8% (largest gain since 1990) to 1.495 mln after June’s 3.5% increase to 1.258 mln (was 1.241 mln).
The Dollar was little changed after the much better housing starts print, though remains at session lows. The USD had been in decline ahead of the data, leaving EURUSD at 27-month highs of 1.1945, and USDJPY at near two-week lows of 105.37. However, Cable remains the stongest/weakest pair today, having breached 1.3200 and posted intra-day highs way beyond R3 (1.3172) at 1.3238.
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Stuart Cowell
Head Market Analyst
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