The US dollar continued to trade on a slippery slope and it got even weaker since the Fed cut the interest rates by a larger-than-expected half percentage point last week. Regarding yesterday’s trading day it lost some ground against the Japanese Yen and reached a record low against the EUR on the basis of different assumptions whether the Federal Reserve will decide to cut borrowing costs for a second time this year, a fact which probably will make U.S. assets less “eye-catching” and which could place the US economy in even a more fragile state.
Yesterday the New Home Sales index was published and we noticed a significant drop from last July when 870,000 were reported, in relation to this month where sales rapidity was very sluggish and only 793,000 were reported, New-homes sales dropped in August to the lowest level in seven years. Total existing homes sales fell 4.3 percent in August to an annual rate of 5.5 million units from July. The new-homes sales report, combined with other up to date economic reports showed a sharp drop in demand in August, suggesting that the economy is losing momentum as it heading into the fall.
Also yesterday the Unemployment Claims index was published and on the basis of these results the greenback recovered to some extent. Fewer people signed up for unemployment benefits last week, this fact is a little bit encouraging due to the recent weakness in the US labor market. Jobless claims fell 15,000 to 298,000 in the week ended Sept. 22 — the lowest level since May.
Due to these facts there have been lately many warning signs of a weakening US economy and many investors and traders still believe that the bearish trend of the USD should continue for a while.
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