Forex Blog: Currency Trading News & Analysis.

November 30th 2005

Housing Data buoys USD

In the last few weeks, many currency traders had begun to shift their attention in favor of the Euro, based on the expectation that the US-EU interest rate differential would soon narrow. That all changed yesterday, as economic data underscored support for monetary tightening. Specifically, the data showed a record month for new home sales, suggesting the housing market and even the US economy are still buoyant. As a result, currency traders and economists are predicting that the Fed will now hike rates three more times, which represents a change from the previous consensus of two times. If the Fed fulfills these expectations, you can expect the USD to continue outpacing the Euro in the near-term. The Financial Times reports:

“The US will be tightening more than the market thinks, and while the ECB will hike this week, we don’t think there will be a follow-up hike until June.”

Read More: Rise in US home sales lifts dollar

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Posted by Adam Kritzer | in Economic Indicators, US Dollar | No Comments »

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.