US Dollar Sideways on Housing Slump, Doubts Over US-China Deal

The US dollar is trading relatively sideways against several currency pairs midweek. The greenback failed to find a concrete direction after housing data disappointed investors and a prominent Republican senator raising doubts on progress in US-China trade negotiations. The buck is trying to salvage the week after falling the first two sessions.

According to the National Association of Realtors, existing home sales fell 2.2% in September to a seasonally adjusted annual rate of 5.38 million. The decline is higher than the market forecast of a 0.1% drop.
In the week ending October 18, mortgage applications plunged 11.9%, following a 0.5% gain in the previous week. This was the biggest decline since October 2015, reports the Mortgage Bankers Association (MBA).
Housing prices also fell short of expectations as the Federal Housing Finance Agency (FHFA)’s House Price Index advanced just 0.2% in August. The median estimate was 0.3%.
In other data, the Richmond Federal Reserve Bank’s manufacturing index edged higher to 8 this month, up from -9 in September.
Speaking in an interview with CNBC, Sen. Marco Rubio (R-FL) expressed doubts that the administration struck a deal with the world’s second-largest economy. Even if the two sides reach a deal, Rubio is skeptical that Beijing will comply with the agreement, citing the strained China-Hong Kong relationship.

If you look at the statements that have come out, it’s been very difficult to get the Chinese to admit that they agreed to what has been reported they agreed to.

I don’t think we have a deal with them in the first traunch. They’re going to try to get away with what they can get away with.

I do believe that they will agree to things they don’t intend to comply with. They made all kinds of agreements about the kind of relationship with Hong Kong they would have and they’re clearing violating that.

Earlier this month, the White House announced that it reached the first phase of a comprehensive trade agreement with China. As part of the terms, which were agreed in principle, China would buy up to $50 billion in US agriculture, address US concerns over intellectual property theft, and open domestic markets to American banks. In exchange, Washington would postpone tariff hikes. This part of the arrangement is expected to be signed at the Asia-Pacific Economic Cooperation (APEC) meetings in Chile next month.
The US Dollar Index, which measures a basket of currencies, rose 0.06% to 97.59, from an opening of 97.49. But the greenback has slipped 0.3% on the week.
The USD/CAD currency pair dipped 0.02% to 1.3091, from an opening of 1.3095, at 16:30 GMT on Wednesday. The EUR/USD tumbled 0.04% to 1.1119, from an opening of 1.1127.

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