Housing figures hit the Dollar
The Dollar weakens on the back of previously owned homes sales figures, which unexpectedly fell in June as rising mortgage rates cooled the rebound in the housing market. The National Association of Realtors reported a 1.2% fall in sales to an annual rate of 5.08 million. However, the median price for previously owned homes still rose 13.5% from a year earlier which is the highest since June 2008.
The US Dollar started the week a little weaker against the major currencies. In addition to the lacklustre home sales figures which weakened it further the markets are starting to feel less convinced the Fed will begin tapering its asset purchase programme in the near term. When it eventually does happen, the pull back in QE is likely to be a very gradual process.
GBP/USD rose to one month highs of $1.5384 during thin trading and on expectations of a stronger UK GDP release on Thursday. Meanwhile, EUR/USD also recorded gains, rising sharply to $1.3218 before easing back. GBP/EUR currently trading around the 1.1640 mark.