Dec 31 2007
Home Sales Will Close 2007
As we wrap up 2007, the greenback finished up the last week of the year, similar to how it started it; at a loss. A flurry of negative economic data has ransacked any chance that the dollar might have had, to recover against its major counterparts before the year’s end. Friday was no different, as New Home Sales figures came back lower than the already disappointing expectations. Chicago PMI numbers, which focus on manufacturer purchases, returned with positive results but could not revive the dollar’s momentous drop following housing sales numbers.
The housing market has been one of the main catalysts in the greenback’s detrimental fall over the second half of 2007. Along with the credit crisis, housing has not shown any signs of turning the corner, and continues to put a heavy strain on the US economy. Prospective home owners in the US are holding out, with the expectation that market prices will still drop. Unfortunately, buyers are what are needed most in the economy right now.
This week, the US economy will continue to release critical economic data, which should map out how the month of January will proceed. As we head into the New Year’s holiday on Tuesday, the economic calendar will see CPI, ISM and Non-Farm indices released. This data, coupled with Unemployment claims, will be started off by today’s 15:00 GMT publication of Existing Home Sales. Expectations are that the figure will return equal to last month’s figure of just under 5 million dollars.
As the dollar continues to falter against its major currency counterparts (closing in on 1.48 versus the Euro), it is likely that we will continue to see the same bearish movement as we approach 2008.
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