New Homes Sales : Economic Reports
Following our forex economic calendar topic ,how does New Homes Sales affect you as a trader? Especially following what has been going on the the USA stock and USD markets, how will it affect you as a forex trader?
New homes sales are important to measure as significant changes in consumer spending often appears in autos and homes first. It is not shocking to see that new homes sales will normally be the first economic measures to turn up before an economic rebound and first to decline before a recession.
New home sales are broken down into four USA regions: South,Northeast, Midwest, and the West.The data can be very volatile, partly because contracts may fall through prior to closing; so the forex and currency markets do not weigh this report too heavily. The caveat here is unless the number is a huge surprise.
However for those interested in the GNP report, this can be more important than existing home sales. The reason for this is that when one buys an existing home, one is not adding to the GNP. When one buys an existing home, one is just swapping an asset with another person and not adding to the GNP.
| If New Home Sales is Up | If New Home Sales is Down | |
|---|---|---|
| Dollar |
Uncertain
|
Uncertain
|
| Bonds |
Down
|
Up
|
| Stocks |
Uncertain
|
Uncertain
|
How New Home Sales Affect Dollar Forex Trading
Neither Stocks or the currency market pay much attention to New Homes Sales Economic report partly because the data is so volatile. However if this news is too bad or unexpected, forex traders would be wise to be wary of market volatility.
Bonds view a positive report as a growing economy, which might lead to higher interest rates in the future- thus lower bond prices.
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