Fundamental data out today are apt to stem the appreciation of the US dollar, and bring in likely gains for the Canadian dollar. Real estate price data from the United States should confirm that housing continued to stabilize this summer, even as manufacturing and labor remained tepid. Whereas, in the Maple Leaf, consumer spending is perceived to have rebounded. A sell bias is recommended for the USD/CAD trading pair in the day’s exchanges.
The S&P/Case-Shiller House Price Index is expected to follow up positively from the recent release of 0.5 percent for June. Economists are factoring in higher prices overall due to fewer foreclosures in July’s sales, effectively bringing a result of 1.3 percent for the month of July. This data forecast follows on reports last week that showed housing sales were stronger than expected in August, rising 7.8 percent, and home builders sentiment jumped to a six-year high.
CNBC reports that Mesirow Financial Chief Economist Diane Swonk says that the sentiment around housing is improving, though mortgage availability remains an issue. “There’s movement in the vacation market. A lot more houses are being built now,” she said, but she added that first time home buyers are still sidelined. Nevertheless, stocks have continued to creep higher since the QE announcement by the Federal Reserve, where the central bank will buy mortgage-backed securities in order to boost the economy and encourage investments in the housing market. Morgan Stanley Chief Equity Strategist Adam Parker acknowledged that the Fed's actions probably have accounted for two-thirds of all the market's gains over the past six months.
Further, contrasting the German business climate report from the Ifo yesterday, consumer confidence in the US is expected to strengthen on the back of renewed optimism following the Fed's QE announcement. The Conference Board index is forecast to rise from 60.6 to 63.1 in September, according to a consensus of analysts.
This time from the Maple Leaf, consumer spending in the month of July probably rebounded from the disappointing figures for June. The Core Retail Sales result is forecast to read 0.3 percent, while the headline figure is projected to post at 0.20 percent. Should these estimates come true, the Loonie is believed to gain some headway over the Greenback in the back of improvements in retail trade. A sell bias is advised for the USD/CAD today. Though be wary of likely technical price corrections.
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