Pound Dollar Exchange Rate Tumbles As US Housing Sector Data Disappoints

Published: Thursday, 29 November 2012 09:00 BST - Written by Frank Davies

STORY LINK Pound Dollar Exchange Rate Tumbles As US Housing Sector Data Disappoints

Yesterday’s afternoon session brought the release of a slightly disappointing set of US housing sector data. The New Homes Sales figure for October showed a marginal downward move to 368,000 from September’s 369,000 showing. Analysts had been factoring in a marked increase to 390,000. This outcome was particularly disappointing given Tuesday afternoon’s strong showing for the latest edition of the US Consumer Confidence survey which had raised hopes that the American housing and labour markets had finally turned a corner. Yesterday’s figure pointed to the opposite being the case.

Risk was already off the menu by the time the New Homes Sales data had been released in the States, with UK, European and North American indices all trading into the red in the early part of the day. This had seen the GBP USD exchange rate ease from the around the 1.6050 level which it was oscillating around in the early part of the week to make a brief visit into the mid-1.5900s.

Looking ahead to today’s data schedule, two releases stand out – this morning’s German Unemployment Change data for the month is expected to show a slight increase in the level of employment in the eurozone’s primary economy. Anything less than a positive result would prove detrimental to the euro. Meanwhile, this afternoon’s session brings the release of the latest US GDP figure. The Q3 number is expected to show that the American economy is expanding at a respectable annualised 2.8% - up from Q2’s showing of 2.0%. However, given the tame nature of yesterday’s domestic housing sector figure, a strong showing for the US GDP data is far from assured.

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