It is set to be another busy day for the US Dollar (USD) with a raft of economic data due to be released. First up we have mortgage applications which will give us a good indication as to how the US housing market is performing, this is set to be followed by New Homes Sales later on in the afternoon trading session which will make the picture even clearer. The expectation is that we will see a slight decline in the number of new homes sold but with recent US data sets performing relatively well and several beating expectations I would not be surprised to see the housing figures exceed the predictions and therefore provide more USD strength.
We also have the latest set of Purchasing Managers Index (PMI) data. This data set provides an indication of business conditions in the services sector which accounts for a large part of US Gross Domestic Product and therefore is a very important announcement. It is expected that we will see an improvement in the figures and with the recent positive economic news coming out of the World’s largest economy this may really help provide yet more support for the Dollar and add more fuel to the fire that Janet Yellen and the rest of the Federal Reserve Bank of America will raise interest rates again in the coming months.
Finally, we are set for the latest Oil stocks change and with the huge price fluctuations over the previous months, this will be an interesting announcement. The States are a net importer of oil as they use more than they export and so when oil prices go up it can hamper growth in the US but when it falls it can really help the US economy flourish, so with low oil prices following the lifting of the sanctions on Iran I expect this to be a strong data set for the US and therefore could again provide support for the US Dollar.