Dollar Likely To Rise As Existing Home Sales Beat Forecast

Dollar Likely To Rise As Existing Home Sales Beat Forecast

By: Simon Furman | Where To Trade | On:22-04-2015 11:56
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Key Highlights

  • GBPCHF and EURCHF turned out to the best performers during the past couple of sessions, as they gained a lot of ground.

  • In the US, the MBA Mortgage Applications published by the Mortgage Bankers Association registered a rise of 2.3%, compared to the last decrease of 2.3%.

  • US MBA Purchase Index came in at 205.4, up from the last reading of 195.6.

  • US Existing Home Sales Change, released by the National Association of Realtors posted an increase of 6.1% in March 2015, compared to the preceding month.

Key Releases:

US MBA Mortgage Applications (US Dollar)

US MBA Purchase Index (US Dollar)

US Existing Home Sales (US Dollar)

US MBA Mortgage Applications

Earlier today in the US, the MBA Mortgage Applications which is a leading indicator of the U.S Housing Market was released by the Mortgage Bankers Association. The MBA Mortgage Applications increased by 2.3% for the week ending April 17th as reported on a seasonally adjusted basis from one week earlier. This was a lot better when compared to the last decline of 2.3%, which can be considered as an encouraging sign. Speaking on the same, Mike Fratantoni, Chief Economist for the MBA stated that the “Application for FHA purchase loans remained strong as well”.

US Existing Home Sales

There was one more release lined up in the US, as the Existing Home Sales report which is an estimated value of housing market conditions and a sensitive factor to the US economy was released by the National Association of Realtors. The forecast was of an increase of 3% in March 2015, compared to the preceding month. However, the outcome was well above the expectation, as the US Existing Home Sales managed to rise by 6.1% to 5.19M, compared to the expectation of 5.03M.

Considering the yearly change, the Existing Home Sales were higher by 10.4% when compared to the same month a year ago. Overall, the data was encouraging and helped the US dollar to some extent. Speaking on the release, the NAR chief economist, Lawrence Yun, mentioned that “After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years”.

Market Reaction

Overall, the US dollar buyers got a couple of reasons to take it higher, and as a result the EURUSD pair corrected lower back towards the 1.0710 support area.

Futures for the Dow Jones Industrial Average traded higher towards 17,985 and the S&P 500 index was up by 5 points to 2,103.

 

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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