Dollar Tumbles on Disastrous Home Sales

EUR/USD rallied strongly today after the report on the US housing situation in July was released. The Forex market continued with the bullish reaction also after the Richmond Fed index release. The currency pair recovered from its monthly bottom of 1.2588 and is now trading near 1.2710.
Existing home sales fell from 5.26 million to 3.83 million in July (seasonally adjusted annual rate). The average forecast for this housing indicator was at 4.68 million. That’s a huge drop and it’s far below even such a pessimistic consensus forecast. Nevertheless the average home price rose a little during that month.
Richmond Federal Reserve manufacturing index showed a decline from 16 to 11 in August. It was worse than the expected drop to 12–14.

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