27, November 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

According to the National Association of Realtors, pending property sales in the USA decreased in October to its lowest level since December 2012. The index of existing homes pending sales has been declining for the fifth straight month – it fell in October by 0,6%, while the expected index increase was 1,3%. Prices increase and rising borrowing costs have a negative impact on the housing market recovery.

The pound markedly fell on Monday after realization of weak data for the UK housing market. According to the British Bankers' Association, the number of approved applications for mortgages fell in October to 42.8 thousands from nearly 4 – years lasting maximum of 43.2 thousands in September - while the expected increase of approved applications was 45 thousands.

Euro also was able to decrease as had the negative impact from some statements of the ECB representatives. The member of ECB Executive Board - Ardo Hansson declared that European Central Bank still has ability to reduce interest rates, and technically he is ready to set a negative deposit rate.

The representative of ECB - Christian Noyer declared that interest rates should remain low for an extended period of time, but, if necessary, they can be further reduced in order to ensure stability of prices at euro area. ECB executive board member - Benoit Kere - declared that inflation fall at the euro area would continue - although it is hoped that the decline would not progress to deflation as the economy is in a process of recovery.