As the Forex traders wait for today’s housing data release, EUR/USD reached its new historical maximum at 1.4778. With just a little trailing back it continues to hover around 1.4770 level ready to strike again to probable 1.4800 level.
Markets await a huge decline in Housing Starts and Building Permits releases today. Both data reports will be published by the United States Census Bureau today at 8:30 AM EDT. Hosing Starts is believed to drop to 1175K annual rate, while Building Permits are expected to fall to 1200K. If these expectations come true, both indicators would be on their bottom levels since 1993.
Combined with high probability of 0.50% rates cut by Federal Reserve (according to current interest rates futures trading) bad housing data expectations cause great pressure on the U.S. currency, which might see another wave of depreciation against other major world currencies.
But if they housing data report will show more optimistic numbers, Forex market will have to play back its “undeserved” gains earlier this day. In this case dollar will have some spare time for correction and maybe a medium-term revaluation.
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