Results on the dollar were mixed for the day with overall gains being isolated against the Euro while losses mounted compared to the Japanese yen, pound sterling and Canadian dollar. Heading into afternoon trade, the greenback has gained some momentum, bringing the USDCHF currency back from the 1.2290 support touch to test the 1.2370 resistance figure. Currently in New York, the pair is trading slightly higher compared to the session open at 1.2353.
Economic data was in favor of dollar bearishness on the day as the market focused on the US housing sector once again. Expected for the session were reports regarding existing home sales and MBA mortgage applications, both of which were lower for the month. Suggestive of an imminent slowdown in the sector, the MBA mortgage applications survey slowed to a 0.1 percent pace compared to earlier increases of 1.4 percent. The more mild increase is suggestive of the lighter volume of mortgage applications as consumers become reluctant ahead of higher interest rates. Subsequently, existing home sales were additionally reported lower, falling compared to earlier consensus estimates. According to the National Association of Realtors, sales of existing homes declined by 4.1 percent in July to a 6.33 million homes rate. The lowest level since January 2004, the latest insight into the sector is suggestive of a considerable slowdown in demand by consumers as higher crude oil prices and higher interest rates are likely to continue eroding at individual disposable income at every level. As a result, growth in the worlds largest economy continues to remain tepid and will likely further the notion of stalled monetary tightening policy.
The economic report additionally weighed on stock markets as benchmark indexes fell for the third straight session on Wednesday. In afternoon trading, the Dow Jones industrial average fell 72.60 points to 11,267.24 as the Sandamp;P 500 declined 4.67 points to 1,294.15. Sparking off bearish equity sentiment following the morning releases were lower than expected earnings and forecasts by Toll Brothers. The homebuilders profits were reported down by 19 percent, recording the first decline in earnings in four years as the housing sector has seemingly topped out. Shares of Toll Brothers Inc. fell 76 cents to $24.44 on the New York Stock Exchange. IBM Corp. shares contributed to the slide, dropping 43 cents to $78.52 as it announced a $1.3 billion acquisition of Internet Security Systems Inc. for $28 per share. The news conversely boosted Internet Security Systems stock, bolstering a move higher by $1.65 to $27.65.
With the housing sector weaker, speculators mounted on the notion of a no rate hike decision by the Federal Reserve in the short term. However, bond yields remained relatively unchanged for the session, with many looking ahead to tomorrows durable goods orders report. Yielding 4.81 percent, the 10-year benchmark note is currently priced at 100 16/32.
