With a lack of important economic data from the States on Friday the USD traded weaker against both the EUR and GBP to close out the week. Wall Street continued to trade in a timid fashion as investors failed to show any real direction and in essence completed a week of sitting on the fence. Today will also be absent of economic data and this will leave traders to read tea leafs as they attempt to discern the directions of the markets. On Tuesday the U.S. will release its Existing Homes Sales figures and on Wednesday New Home Sales numbers are on the schedule. The building and housing sector have produced poor results recently and investors will monitor the outcome from these reports carefully. Data from the major economies has been widely disappointing the past two weeks and investor confidence for a strong recovery could be waning.
The USD lost steam against the EUR and GBP last week and the question that needs to be asked is why this has come about. The Greenback is still within the stronger parts of its half year trend against the two currencies and last week’s results may turn out to be a short term movement. However, there is no disputing that some traders who have looked to take advantage of what they have perceived as an overbought USD – have flourished. Data this week could continue to build on the attitude among investors that the American economy is not recovering as strong as the government has suggested in the past. Traders will see weekly Unemployment Claims on Thursday and Final GDP numbers on Friday. The jobless situation in the States has certainly not gone away and if no major improvement comes on Thursday and is followed by lackluster GDP numbers on Friday the markets, particularly the equities could get rattled. The USD has run into stiff winds the past week and its trading will provide opportunities for traders.
Written by bforex.com