The greenback slid against a basket of major currencies, carrying over losses from Friday, when it dropped by -0.40%. Markets are increasingly sour on the dollar as expectations of another rate hike by the US Federal Reserve fade away due to weak data and slowing economic growth.
EURUSD Pair Sits Under Heavy Resistance
The US dollar hit the highest peak in three weeks relative to the euro a week ago, propped up by forecasts that the FOMC would further raise interest rates in September. Since then, expectations have been dampened as US economic indicators slip below consensus forecasts.
Reflecting the Fed’s issues James Bullard, President of the St. Louis Federal Reserve, noted at the end of last week that officials should hold off on further tightening monetary policy until consumer price growth sustainably reaches the preferred 2.00% target.
Figures due out in the coming week include consumer sentiment data for June, the final revision of gross domestic product for the first quarter, and pending home sales. Meanwhile, the EURUSD pair managed to break modestly above strong resistance sitting at 1.1200. Should the pair close above the resistance line, traders should anticipate further softness in the USD to propel the currency pair back toward highs from June.
Sales of New Homes in US Accelerate
Sales of new homesin the US picked up in May, per a report on Friday from the Department of Commerce, further supporting the hypothesis that the real estate market remains stable. Sales of single-family units rebounded by 2.90% in May to a year-over-year 610,000 pace, further boosting the sales pace by an 8.90% annualized rate. The median sale price for new homes surged by 11.50% to reach record highs of $345,800. Average sale prices also hit all-time highs following a 10.50% increase to reach $406,400.
The most recent data should reduce investor worries over the recent deceleration in construction that was revealed with softer housing starts and permits numbers as contractors react to rising demand. The S&P 500 index was back on the rise in early Monday trade following two straight flat performances, pushing higher to hover just above 2440.