Forex News – Housing starts fall in the U.S.

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United States housing starts data were released today showing fewer homes were built in July versus June, indicating the housing sector is still sluggish.

Data recorded that housing starts dropped 1.5 percent to a 604,000 annual rate from a downwardly revised June number of 613,000. The decline was in line with expectations though

Building permits, a proxy for future construction, also dropped new building permits fell 3.2 percent to a 597,000-unit pace last month. Economists had expected overall building permits in July to fall to a 605,000-unit pace.

Construction in the U.S. housing industry has been suffering due to falling home sales, rising foreclosures and elevated unemployment figures.

Meanwhile, an oversupply of unsold homes due to an excessive inventory of existing single-family homes gave builders little incentive to break ground on new projects.

After the data was released, the dollar weakened against the Swiss franc and yen as well as the euro. Investors are concerned that the global economy might be slowing down much faster than previously thought, especially combined with weak euro zone growth data.