Article by AlgosysFx Forex Trading Solutions
Encouraging signs of improvements in the world’s largest economy are presumed to strengthen the US dollar opposite its safe haven counterpart in the exchanges today. Yesterday, reports indicated that consumer confidence rose to a seven-month high, factory conditions in the central Atlantic expanded, and house prices edged up. Today, the New Home Sales report is once again presumed to underscore that the US housing market has finally turned a corner.
Going by a report from the Conference Board, rising stock prices and a brighter outlook for jobs have incited more optimism from American consumers. The Consumer Confidence index jumped from 61.3 points to 71.3 points in September, its strongest reading since February this year. The outcome exceeded estimates of a modest rise to a grade of 63.1, providing improved prospects for consumer spending which accounts for about 70 percent of the US economy. Better expectations for hiring largely drove the increase, with the percentage of respondents anticipating more jobs to become available in the next six months climbing to its highest level since February. Those who expect incomes to rise likewise increased to its highest level this year.
Stabilization in housing is also playing a key role in the improvement in confidence. Average home prices in July rose 1.2 percent from a year earlier, the largest 12-month increase since August 2010, according to S&P/Case-Shiller data released yesterday. The Federal Housing Finance Agency’s House Price Index also a 0.2 percent inclined in July after 0.6 percent increases in the previous two months. Such trends solidify hopes that after five years of decline, house prices have bottomed out. According to economists, the gain supports the view that even with the broader economic recovery struggling, the housing recovery is sustainable. Such reports follow recent data suggesting home re-sales and groundbreaking on new properties rose in August while business sentiment among homebuilders hit a more than six-year high this month.
Further optimism for the real estate market is presumed to be delivered by a projected increase in New Home Sales in August. The annualized number of single-family homes sold last month is said to have mounted from 372,000 to 381,000, potentially its highest level in more than two years. Low mortgage rates have likely stimulated buyers to finally enter the housing market. With consumer confidence improving, sales are likely to see continued gains. Amid the foregoing positive developments from the US economy, the Greenback is believed to rise against its fellow safe haven Swissie. Hence, a long position is recommended today.
For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx
