The dollar was the big winner yesterday, perhaps benefitting more from poor economic data from China than any great strength in its own economy. It gained nearly 1.5% against the Australian dollar, around 1% on the euro and Canadian dollar and 0.60% against sterling.
The was despite the poor data on American manufacturing, with the New York Empire State Manufacturing Index at a shock -31 against an expected reading of 8. This is the lowest reading since May 2020.
While China’s house prices are falling, in the US they have been rising by around 20%. Much of that rise has been forced by a shortage of houses to buy, so the data on housing starts for July will be interesting, this afternoon. In June 2022 they were marginally fewer than June 2021 but that is expected to change for July to around 1.57 million.
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