USD – Bad Data Becoming The Norm

Additional poor data was reported from the U.S. on Wednesday as the New Home Sales completely missed its estimate. The outcome of 276k was far short of the 333k expectation. And troubling to investors was that the previous month’s total was revised downwards too, following in the footsteps of the Existing Home Sales data reported a day earlier. Topping off this wreckage were ugly Core Durable Goods Orders which came in with a number of minus -3.8% compared to the forecast of plus 0.6%. The USD traded in a stable range most of the day, but interestingly enough did give back a small amount of ground to the EUR and GBP. Wall Street started the day off weakly, but also managed to surprisingly finish the day with slightly positive gains. Today the weekly Unemployment Claims will be released and the result is supposed to be a bit better than last week’s number.

There has been very little in the way of positive economic data from the U.S. this week. However, the USD has managed to turn in gains as a whole and this can be interpreted as a safe haven play. Investors continue to stay away from the equity markets and volumes are still low even taking into context that we are finishing the dog days of summer. Essentially there is one week of summer trading left before the Labor Day weekend arises a little more than a week from now. Tomorrow the Revised GDP will be published from the U.S. and traders who have had their sentiment jarred by lackluster data will be weary of what could develop. Wall Street has been negative for two and a half weeks and in order to create a change of fundamental beliefs may prove tough before going into the weekend. The USD may continue to test ranges today as ‘fair value’ is pricked at by traders.

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