US Dollar Rallies Following the Release of Positive Pending Home Sales Data

The US dollar today rallied against its main peers following the release of positive pending home sales data, which beat expectations. The US dollar rallied higher despite the poor performance of the bond market as US bond yields and the Dow Jones Industrial Average fell to record lows during today’s session.

The greenback’s rally was reflected in the US Dollar Index, which opened the day’s session at 99.70 and was trading at 100.08 at the time of writing.

The greenback’s rally was triggered by the release of pending home sales data by the National Association of Realtors, which indicated that pending home sales data had risen by their largest margin in a year, to stand at 5.5% in February. The pending homes sales data was the only positive news out of the US docket as crude oil and gasoline inventories data did not meet market expectations.

Speeches by Chicago Fed Charles Evans and Boston Fed Eric Rosengren did not have a major impact on the currency despite the hawkish tone of both speeches. Evans said that two rate hikes are highly likely, while three hikes could happen, but four would require stronger Fundamentals. Rosengren also spoke in favor of four rate hikes this year.

The currency is likely to be affected by the GDP report for the fourth quarter scheduled for release tomorrow.

The GBP/USD was trading at 1.2413 as at 17:10 GMT having dropped from a high of 1.2476 prior to the release. The EUR/USD was trading at 1.0753 having dropped from a high of 1.0792 earlier today.

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