By Tuesday morning the major currency pair have started losing its positions. The current EURUSD quotation is 1.1192. For today the US macroeconomic calendar offers a report on the real estate sales on the secondary market in June. The forecast suggests that the indicator has grown to 5.35 million units against 5.34 million units earlier. The statistics is calculated for a year’s time and is issued a month or a month and a half late due to the procedure of data collecting.
On the one hand, the housing market data is normally very prone to seasonal fluctuations. This might be the current case, as we are in the middle of the holiday season, so even if the real results come different from the forecast, this will not be critical. On the other hand, the housing market is greatly influenced by the demand, pending because of economic problems; luckily, now is not the case, the US economy is rather stable.
A good example of seasonal influence upon the real estate market is the last week data about the number of new house foundations laid in June (1.25 million, less than in May) and the number of building permits given (1.22 million, also less than a month earlier). Here we can see the seasonal factor in pure form, that is why euro/dollar react calmly on such reports.
These days the real estate sector in the US looks well-balanced. After all, the labour market helps: the unemployment is low, wages grow, consumer trust is according. Mortgage rates react very sensitively on the treasury bonds pricing and behaviour. Presently, they are really interesting to the consumer.
The US Federal Reserve, making the decision about the interest rates, takes into account the real estate market situation as well, because it illustrates the mortgage rates behavior, the construction market state, the consumer mood. The stronger the housing sector seems, the less reasons the Fed has for decreasing the interest rate. The conceptional decision about the July session has been made already: the interest rate will decrease. However, later a balance on the real estate market may retain the Fed from yet another lowering of the interest rate. This is good for the dollar.