Pending Sales of Existing homes in the US has risen for the 3rd month in a row for the month of December. This shows yet again that the sector that initially triggered the US recession is now stabilising moving forward into 2011.

Pending home sales increased more than forecast climbing 2%, the National Association of Realtors showed today. The low borrowing costs and reduced prices of US homes have helped attract new buyers to the market.

Stocks rallied this morning after better than expected earnings reports from US companies helped ease concerns over the claims of ongoing increasing unemployment. The S&P 500 has however pulled back in afternoon trade to the 1295 level.

The GBP/USD pair has seen a substantial amount of volatility in the past 24 hours as market speculate on the UK economic recovery moving forward after the poor GDP figures released on Tuesday and factor in the Fed’s dovish outlook on interest rates for 2011.

Low inflation in the US forced a unanimous decision to maintain interest rates at record low rates in order to try and spur on the economic recovery and help to pick up price pressure.

The GBP/EUR pair has traded within a relatively tight range over the last 24 hours as markets decide whether to continue to sell into the Pound or re-focus on European troubles.

Tomorrow sees the release of US Q4 GDP, personal consumption and GDP figures. These are key to traders looking for insight on how the US economy has performed on the open of this year, we can expect the market to calm overnnight ahead of a potential storm tomorrow if the data shows anything other than good news. If any shock is released we could see the markets rebreak the key 1.60 level on the cable pair.

If you have a currency requirement or have any questions or queries please don’t hesitate to contact me.

Best Regards

Luke Zorab
Torfx Currency Dealer

“Any opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions.”