The US dollar moved marginally higher against the euro on Tuesday following the release of better than expected data for the housing market in the United States. However, investorsâ anticipation for a speech that Federal Reserve Chairwoman Janet Yellen is scheduled to give tomorrow has kept the greenbackâs gains dormant today.
The number of previously owned homes that were sold in the United States beat estimates in October as the housing market overcame disruptions caused by hurricanes earlier this year. The US National Association of Realtors said in a report today that existing home sales rose 2.0% last month to a seasonally adjusted annual rate of 5.48 million units following a 0.4% gain in September. Meanwhile, analysts had expected a smaller 0.7% increase to 5.42 million units in October.
Octoberâs gain was the biggest since March, despite continued supply shortage that sidelined newcomers to the market and weighed on buyersâ ability to find suitable houses. Existing home sales were 0.9% lower last month from a year ago.
The report added that median existing home price for all house types rose to $247,000 in October, which was 5.5% higher than a year earlier. The price increase last month marked the 68th consecutive month of gains on a yearly basis.
Home sales are viewed as one of the key indicators for the health of the US economy. The increase in October reflected strong labor market and steady wage growth, according to National Association of Realtors chief economist Lawrence Yun.
However, the US dollar failed to harness more support from todayâs positive data as investors kept their eyes on Yellenâs upcoming speech. The speech may contain some signals on monetary policy and the pace of interest rate hikes in the short term. The CME Group FedWatch tool, which tracks prices of federal funds futures to measure chances of upcoming policy changes, showed a 46.0% chance of an interest rate increase in March 2018.
The Federal Reserve is due to release the minutes of the last Federal Open Market Committeeâs meeting tomorrow. The minutes may help investors form a clearer picture of the roadmap ahead for monetary policy.
On the economic front, a report on durable goods orders that will be published on Wednesday may reveal a smaller gain in October than September. Another report on the same day is expected to show a tiny gain in consumer confidence.
EUR/USD traded at 1.1730 at 16:10 GMT on Tuesday after falling to 1.1714 at 13:00 GMT, the pairâs lowest level since November 14. EUR/USD began trading today at 1.1739. GBP/USD was at 1.3231 after touching 1.3219 at 10:55 GMT, the pairâs lowest level for the day. GBP/USD starting the day at 1.3243.
The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, fell to 94.00 as of 16:10 GMT today from 94.08 yesterday.
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