The U.S. dollar was seen rallying to previously established highs from just a few weeks ago. The strong rally in the USD sent most of its peers back to their lows. Economic data from the Eurozone was relatively quiet for the most part.
The NY trading session saw the National House Price index falling for the sixth consecutive month. Reports showed that housing prices rose 5.5% on an annualized basis in September. This was weaker than the 5.7% increase registered in August.
The weaker NHPI report echoes similar views as existing home sales; housing starts fell sharply in September. The declines were attributed to the higher costs for borrowing.
The Fed vice chair, Richard Clarida was speaking yesterday. He supported the Fed’s view for gradual rate hikes noting that it was appropriate for interest rates to rise as it moves closer to its optimal setting.
Looking ahead, the markets seem to a somewhat busy day today. In the overnight trading session, the RBNZ Governor Orr was speaking. The RBNZ head said that the central bank would ease lending restrictions from January next year while requiring higher capital requirements for banks.
The European session will see the release of the German Gfk consumer climate. Economists forecast the consumer climate to ease to 10.5 from 10.6. Meanwhile, in the NY trading session the, second revised GDP estimates will be coming out. There is an expectation for the third quarter GDP to be revised slightly higher to 3.6% from the initial estimates which showed a 3.5% increase.
The GDP report is later followed by the new home sales report which is expected to rise to 583k on a seasonally adjusted basis. The Richmond Fed manufacturing index is expected to edge higher to 16 from 15 previously.
Wrapping up the day, Fed Chair, Jerome Powell is expected to speak late in the evening.
