Aug 25 2008
Existing Home Sales on Tap
Last week was a volatile trading week for the U.S. dollar and overall it saw mixed results with gains against most counterparts besides the EUR. During last week, there was a slight loss against the EUR while a lot of bullishness was seen against the GBP in particular during the end of the market week. With the Sterling’s weak economic data releases including a fall in its GDP compared to previous figure, the USD took the cross down to the mid 1.85’s. In terms of American economic news, there were more ups than downs with the major positive releases coming from the PPI, Unemployment Claims and Bernake’s speech on Friday. The Fed Chairman spoke on Friday and said that the Fed should be able to maintain its low federal funds target rate for a while getting help by the recent drop in commodity prices coupled with reduced demand for resources due to the economic downturn should reduce the threat of inflation. Trader should still note that Bernake thinks that the inflation outlook is still “highly uncertain”.
This week will start right away with some volatility for the USD as the very significant Existing Home Sales figure is expected to be released today and should rise compared to last month. There is a batch of economic releases scheduled for this week as every day will have major news. The highlights of the week will be the releases of the New Home Sales, Core Durable Goods Orders, Preliminary GDP and Personal Spending. Results should be mixed versus their previous figures with the New Home Sales expected to stay steady and a rise forecasted for the Prelim GDP, however the other two main releases are expected to decline compare to their previous results. Day traders should pay close attention to the economic data coming out of the U.S. this week as the USD trading trends should be very volatility this week.
Compared to a very volatile week expected for the USD, there will be less action today as the only releases scheduled is the Existing Home Sales. Although this release could cause the USD to see some bullishness, there are no other news that are expected out of the USD, EUR and GBP and this release will be the main factor in today’s trading session.
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