The U.S. Dollar Extends Declines as U.S. Pending Home Sales Unexpectedly Slumped in September

THE TAKEAWAY: The U.S. Pending Home Sales Unexpectedly Slump in September> Sales in all four region through out the United States suffered losses>U.S. dollar weakens versus most of its peers.

The report issued by the National Association of Realtors today unveiled that the pending home sales in September slipped 4.6 percent from the previous month, following 1.2 percent drop in August and 1.3 percent loss in July. The reading missed consensus forecasts as economists from Bloomberg survey called for a gain of 0.4 percent. Projections ranged from a plunge of 1.5 percent to a surge of 2.8 percent. Pending home sales advanced 7.9 percent from a year earlier, well below expectations of 12.6 percent, though. Obviously, the figure released today quickly dampened hopes on housing market that was freshly raised yesterday when new home sales rose more than forecast in September.

U.S. Pending Home Sales: June 2010 to Present

Prepared by Trang Nguyen

All four regions throughout the United States experienced declines in number of contracts to purchase previously owned home in September, led by the South and the Midwest. The South region, the only one registering a 2.6 percent gain in the previous month, disappointedly retreated 5.3 percent last month, the largest loss among four regions. Likewise, pending home sales in Midwest slid 4.7 percent. Sales in the Northeast and the West also shrank by 3.0 percent and 2.3 percent, respectively.

EUR/USD 1-minute Chart: October 27, 2011

Charts created using Strategy Trader– Prepared by Trang Nguyen

The U.S. dollar was the worst performer against its major trading partners in North America trading session today since investors have scaled back their appetite for risk on hopes that European‘s prolonged debt crisis can be solved, and specifically Greek sovereign default can be prevented this week. The Euro has risen through 100-day moving average versus the dollar this morning. As can be seen from the one-minute EURUSD chart above, the currency pair traded at 1.4139 before the housing data release. The EURUSD pair has traded in narrow range between 1.4110 and 1.4139 following the release. At the time this report was written, the Euro climbed again to 1.4139. Monetary managers have cut their greenback holdings in their portfolio amid speculation on the third round of quantitative easing to boost economic growth and spur housing demand that remained relatively weak since the mortgage crisis in 2008.

--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com

To contact Trang, email tnguyen@dailyfx.com