U.S. Pending Home Sales Forecast for April 1st
March 30th, 2009 Posted in In-Depth Analysis, Market Movers
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!
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Tags: Dollar forecast, dollar trading, economic indicators, Forex, forex blog, Forex Trading, home sales, housing data, market forecast, Pending Home Sales, USD, weekly prediction
