Existing Home Sales: Another Lackluster Release?
At 10:00 AM EST on Tuesday, March 23rd, the National Association of Realtors (NAR) releases its monthly existing home sales figure.
Existing Home Sales is the number of existing residential buildings sold during the previous month. It does not include new construction. The figure is annualized which means the number is the monthly figure times 12. The currency theory behind this figure being important is that existing home sales trigger additional spending by the consumer for a host of products and services surrounding the home purchase. This spending increases economic activity which in turn spurs the economy lifting the domestic currency.
After a several day move higher on Euro strength, the EUR/USD pair has slipped back downward. Close to looking like a continuation of the down trend the USD is gaining power. If the pair drops below the critical 1.3500 range, the downtrend will be back in full effect. This release is forecast to be 5.01m which is down 0.04 from the last existing home sales figure. I believe this estimate will be inline with the actual figure thus any reaction should be muted. This market is defined by the potential interest rate increase in the U.S. presently. Any other data will play second fiddle until a potential surprise increase prior to the April 28th FOMC meeting.
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.