Alerts

]With FOMC and G20 in Focus, US Greenback Shrugs Off Disappointing Housing Knowledge

Speaking Factors

– October US Pending House Gross sales upset considerably, dropping by -2.6% m/m and -Four.6% y/y, each well-below expectations.

– The info at this time slot in with the broader pattern of underwhelming US housing knowledge in 2018; pending residence gross sales have declined on an annualized foundation in 10 of the previous 11 months.

– Merchants stay targeted on the discharge of the November FOMC assembly minutes later at this time in addition to information from the G20 summit in Argentina that the US-China commerce battle is coming to an finish.

See the DailyFX Financial Calendar and see what reside protection for key occasion threat impacting FX markets is scheduled for subsequent week on the DailyFX Webinar Calendar.

Because the Federal Reserve has tightened financial coverage and pushed rates of interest increased, there was one clear loser: the US housing market. The influence of rising mortgage charges in opposition to a backdrop of a multi-year stagnation in wages has diminished affordability, leaving potential US homebuyers on the sidelines in the meanwhile.

The -Four.6% y/y decline in October US Pending House Gross sales was a sizeable miss relative to expectations (-2.Eight%), and follows after yesterday’s disappointing October US New House Gross sales report (-Eight.9% y/y). However the disappointing knowledge is absolutely simply extra of the identical; Pending House Gross sales have fallen, on an annual charges, in 10 of the previous 11 months. Accordingly, Pending House Gross sales has fallen again to its lowest degree general since June 2014.

The disappointing housing knowledge matches in with what could also be a brand new pattern of weaker US financial knowledge. Earlier within the day, US WeeklyJobless Claims rose again to their highest degree in six months. Gauges of financial knowledge momentum have began to deteriorate over the previous few weeks, with the US Citi Financial Shock Index dropping from +14 on November 16 (its excessive for the month) to -Four.9 at this time (its lowest studying since -5.Four on October 15).

Listed here are the info driving the US Greenback this morning:

– USD Pending House Gross sales (OCT): -2.6% versus +zero.5% anticipated, from +zero.7% (revised increased from +zero.5%) (m/m)

– USD Pending House Gross sales (OCT): -Four.6% versus -2.Eight% anticipated, from -Three.Three% (revised increased from -Three.Four%) (y/y)

See the DailyFX Financial Calendar for Thursday, November 29, 2018.

DXY Index Value Chart: 1-minute Timeframe (November 29, 2018) (Chart 1)

]With FOMC and G20 in Focus, US Dollar Shrugs Off Disappointing Housing Data

Following the inflation report, the US Greenback continued to commerce inside the vary established between 11 and 13 GMT at this time, with the DXY Index buying and selling in at 96.84 on the time this report was written. Across the knowledge launch, the DXY Index traded from 96.77 to as excessive as 96.92. Regardless of features by EUR/USD and losses by USD/JPY at this time, the DXY Index continues to learn from ongoing rigidity within the Brexit saga as GBP/USD losses stay ingrained.

Learn extra: DXY Index Hovers Beneath Yearly Highs Earlier than Powell Speech

— Written by Christopher Vecchio, CFA, Senior Forex Strategist

To contact Christopher Vecchio, e-mailcvecchio@wiadforex.com

Observe him on Twitter at@CVecchioFX

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