FOREXYARD: Forex News Blog | |
- U.S. Prelim GDP Figure May Drive Dollar Up
- U.S. Housing Market Update
- US Existing Home Sales on Tap
- U.S. Pending Home Sales Forecast for April 1st
- Existing Home Sales Report – January 2009
- What is the “U.S. New Home Sales” Indicator?
| U.S. Prelim GDP Figure May Drive Dollar Up Posted: 27 Aug 2010 02:32 AM PDT
In what is predicted to be yet another sign of how beleaguered the U.S. economy currently is, the Prelim GDP report, set to be released at 12:30 GMT today, will likely show a significant drop in the 2nd quarter Gross Domestic Product. The GDP figure is released in 3 separate formats: Advanced, Preliminary and Final. The Advanced figure, released roughly a month ago, showed a 2.4% growth in the U.S. economy for this quarter. While the figure largely came in as predicted, it still represented a significant drop from 1st quarter growth. Today's figure, an updated version of the Advanced GDP, is forecasted to come in at 1.5%. So what changed in between the time of the Advanced report and today's Preliminary one? A larger than expected trade deficit, as well as a drop in home sales have both played a considerable role in the current pessimistic view of the U.S. economy. The latest U.S. Trade Balance figure, released in early August, showed the trade deficit at its highest level since October 2008. Additionally, new and existing home sales for July both dropped more than originally forecasted. The affect today's report can have on the marketplace will likely be substantial. Assuming the GDP figure comes in as predicted, the U.S. dollar may actually see some gains against its main currency rivals. Investor confidence in the global economic recovery has been fairly low as of late. Riskier currencies like the euro and British pound have tumbled over the last week, especially against their safe-haven counterparts, the dollar and yen. With little positive news coming out of the euro-zone to prop up the euro and pound, risk aversion is most definitely the predominant market trend. Barring any major surprises, the Prelim GDP figure is unlikely to give investors any cause to return to riskier assets, and will likely boost the dollar and yen as a result. Traders should remember that today's report is still not the official figure for 2nd quarter GDP. The final report is scheduled to be released in the last week of September. Any changes in the U.S. economy between now and then could greatly alter today's figure. |
| Posted: 15 Jun 2009 06:57 AM PDT
Reports on manufacturing and housing this week will probably show evidence that the recession- stricken U.S. economy is bottoming out. The U.S housing recession that triggered the credit crisis and global slump is showing signs of bottoming as sales and construction have stabilized near historically low levels. A Commerce Department report tomorrow may show housing starts last month rose 5.9% to a 485,000 annual pace, while Building Permits report, used as a predictor of future construction, may show builders began work on more houses as sales steadied and consumer prices rose. The data will be released Tuesday at 12:30 GMT. In case the Housing Starts and Building Permits data will decrease below the expectations, the U.S dollar may weaken against its major rivals; the EUR and the British Pound. However, if the numbers will come in line with the expectations or higher, traders will see the USD trading become highly volatile. |
| Posted: 27 May 2009 12:19 AM PDT
27 May 2009 GMT: U.S Existing Home Sales 14:00 • Annualized number of residential buildings that were sold during the previous month, excluding new construction. German Prelim CPI • This is a change in the price of goods and services purchased by consumers. Tips on Crude Oil • Crude Oil resumed its bullish trend yesterday, as stock prices rose and American Consumer Confidence delivered a surprisingly positive result. |
| U.S. Pending Home Sales Forecast for April 1st Posted: 30 Mar 2009 03:23 AM PDT
As you all probably know, this week on Wednesday the U.S. Pending Home Sales report is expected, and its large effect on the market urged me to write this article. First, I’ll try to explain what this report is used for, and why it influences the Dollar’s value, and then I’ll finish with a little prediction you may choose to utilize or not. The Pending Home Sales report is an economic indicator published by the National Association of Realtors. It measures the change in the number of homes under contract to be bought but still awaiting the closure of the transaction, excluding any new construction. Its impact on the economy derives from two different sources. One – after purchasing a new home, as you all probably know quite well, people tend to redecorate the house and to spend thousands of dollars on making it a home. Two – the financial bank and broker who are being paid to execute the transaction are also incurring increased funding which can also spur further investment. All this makes it a leading indicator of economic health, which has an immense effect on the local currency – in our case, the USD. Lately, the report reflected mixed results which were part of the reasons for the crazy trading rate of the Dollar for the past month. The expected figure is forecasted to be 1.1% greater than the previous release, which would help to strengthen the USD against its leading pairs and crosses. The current downtrend of the EUR/USD that we are experiencing at the moment is also due to this forecast, which made investors more confident in the U.S economy. However, it should be stated that a surprising negative result could easily have the reversed impact on the USD, and all you traders out there should stay very alert when the actual result will be published. The release of this figure is going to be a paramount time to open large positions and ride out the wave! |
| Existing Home Sales Report – January 2009 Posted: 25 Feb 2009 04:11 AM PST
The U.S. Existing Home Sales report is a leading economic indicator used to measure the number of already existing homes that were sold during the previous month. This report predominantly acts as a precursor for other housing reports, such as New Home Sales, and offers an early glimpse into these later reports. It is a leading indicator of housing demand and economic health because the sale of an existing home impacts a wide variety of consumer spending figures, such as renovations for the home purchased, and mortgages being taken out to purchase the home. Inline or Better than Market Forecasts: An increasing figure will most likely be interpreted by investors as proof that the American people are beginning to buy more homes, and that the mortgage banks are less reluctant to offer mortgages as they used to be. Such a scenario may extend the greenback’s recent bullish movement, and the EUR/USD may test the 1.2600 level. As a result of the mortgage crisis in the U.S., which has continued to threaten world markets, the importance of the housing sector has increased significantly in recent months and its impact on the nation’s currency is always felt. Worse than Forecasted: Americans lacking the confidence to purchase homes is yet another indicator that their economy is in dire straits. In this turn of events, the EUR/USD might correct itself up to reach as high as the 1.3000 level in the short run. |
| What is the “U.S. New Home Sales” Indicator? Posted: 22 Sep 2008 05:21 AM PDT
U.S. New Home Sales is a leading economic indicator used to measure the annual number of new single-family homes that were sold during the previous month. While this is a monthly figure, it is reported in an annualized format. This report predominantly helps to validate trends seen in other forward-looking housing indicators, such as the Existing Home Sales. It is a leading indicator of economic health because the sale of a new home impacts a wide variety of consumer spending, such as furniture and appliances that are purchased for the home, a mortgage that’s being sold by the financing bank, and brokers that are paid to execute the transaction. Also important is the inclusion of mandatory and optional insurance on these new homes. As a result of the mortgage crisis in the U.S., which has continued to threaten world markets, the importance of the housing sector has increased significantly. What if the Survey Comes Inline with Current Market Forecasts? Expectations for this month are suggesting that the U.S. New Home Sales will rise by 510K in August, reflecting a 5K decrease from July. Such a result could demonstrate a shrinking housing sector in the U.S., which has been one of the U.S. economy’s greatest concerns. It is widely known that this crisis was initiated as a result of the non-covered mortgages that dropped mortgage banks one by one, and has just recently taken the 160-year-old Lehman Brothers’ bank to the point of filing for bankruptcy protection. A decreasing figure will most likely be interpreted by investors as yet more proof that the American people are avoiding buying new homes, and that the mortgage banks are reluctant to offer mortgages as freely as they used to. Such a scenario will probably extend the greenback’s bearish movement, and the EUR/USD might rise to test the 1.4800 level. What if the Survey Will Surprise With Bullishness? When the actual figure is higher than forecasted, traders are likely to see the USD appreciate against its currency pairs and crosses. The radical trading week we have just experienced, which included an extremely volatile trading session, concluded with significant weakness for the USD. Investors are now following the opportunity to make profits out of their open positions on the USD, and a better-than-expected figure on the New Home Sales survey, such as 540K, will possibly provide them that exact opportunity. Such a figure is good because it will ease global market concerns regarding an expanding mortgage crisis. U.S. citizens feeling confident enough to purchase new homes is the best news that the American leadership can hope for, and the USD will rise in accordance. In this turn of events, the EUR/USD might correct itself down to reach as low as the 1.4400 level. |
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