Dollar trades at six month high vs. euro in currency trading. US New Home Sales rise. | CountingPips Forex Blog

August 26, 2008 - Forex Economic News

Dollar trades at six month high vs. euro in currency trading. US New Home Sales rise.

The U.S. dollar rose in forex trading today as gloomy economic news out of Europe helped to propel the dollar to a six month high verses the European euro. The dollar reached its highest exchange rate verses the euro since February 14th of this year at approximately 1.4580 dollars per euro today before giving back some of its gains and trading at 1.4655 in late afternoon of the U.S. trading session.

USD Currency Trading The dollar gained against the euro as a German business climate survey showed declining results and final results of German GDP numbers confirmed a contraction in the country. The IFO German Business Climate Survey produced by the CESifo Group declined for the third straight month as the Business Climate Index fell to 94.8 in August from 97.5 in July. The Expectations Index declined to 87.0 in August from 90.0 in July and the Current Assessment Index fell to 103.2 in August from 105.7 in July. Each of the three indexes fell more than forecasted.

The final German GDP numbers, released by the Federal Statistics Office, showed that the second quarter GDP contracted by 0.5 percent following the first quarter's revised GDP growth of 1.3 percent. This release matches the preliminary figures released on August 14th and marks the first decline in GDP growth for Germany in close to four years.

The dollar also showed gains today verses the British pound, Australian dollar, Swiss franc, and Japanese yen while showing a loss verses the Canadian dollar and being virtually unchanged verses the New Zealand dollar.

US Economic Roundup - US New Homes Sales advance in July.

New Home Sales data was released in the United States today showed that new home sales increased in the month of July according to data released by the Department of Commerce today. Purchases of new single family homes rose to an annual rate of 515,000 in July, a 2.4 percent gain from June's rate of 503,000. July's annual rate of new homes sold was still 35.3 percent lower than the that of July 2007 and below market forecasts of an annual rate of 525,000 new sales. The median sales price of new homes in July was $230,700 down 6.3 percent from $246,200 in July 2007 while the average sales price was $294,600 down from $307,100 in July 2007.

A Conference Board consumer confidence survey was also released today and helped provide support to the dollar as the survey edged up in August compared to last month with an increase to 56.9 in August from 51.9 in July. The present situation part of the survey fell from last month to 63.2 while the expectations index improved from 42.7 in July to 52.8 in August. Market forecasts were expecting the survey to increase to a 53.0 score this month.

The S&P/Case Shiller Home Price Index was released today and showed that home prices in the U.S. continued to decline as the indexes fell to new record lows in June. The report showed that the 10-city composite index fell by a new record annual rate of 17.0 percent in May while the 20-city composite also fell a new record annual rate of 15.9 percent when compared to June 2007. Las Vegas and Miami once again showed the biggest declines in home prices nationally as they registered annual declines of -28.6 and -28.3 percent in June, respectively. Despite the new record low annual numbers for June, the rate of decline was less than previous months and nine metropolitan areas showed growing house prices for the month.

EUR/USD Chart - The dollar reached a six month against the euro in currency trading today(Daily Chart).

Forex Chart

tags: forex trading, euro, usd, house prices, confidence, home sales, gdp

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