USD Awaits Housing Data

At 4:00 AM Eurozone October Manufacturing PMI (exp 53.0, prev 53.2)
Eurozone August Current Account Surplus (exp 2.0 bln euros, prev 1.7 bln euros)
Eurozone October services PMI (exp 54.5, prev 54.2)
At 10:00 AM US September Existing Home Sales (exp 5.25 mln units, prev 5.5 mln units)

The greenback continues to struggle against the majors, falling sharply against the Australian dollar on burgeoning rate hike expectations for the RBA. Meanwhile, economic data from the US suggests further deterioration in the housing market – thereby raising the question of whether there will be spillover effects onto other parts of the economy, namely consumer spending. In the session ahead, traders will digest September existing home sales, which is seen slumping further to 5.25 million units, down from 5.5 million units from August.

Dollar Fell, Eyes On Housing Data

The dollar pared its gains against the euro and sterling as the bearish sentiment over the dollar does not change after Monday¡¯s unexpected dollar strength. The euro rebounded back to around 1.4250 versus the dollar, while the sterling passed through 2.05 against the dollar.

The market will focus on US housing data this week and the FOMC next week. US existing home sales due tomorrow is seen to fall from an annual rate of 5.5 million units to 5.25 million in September. Also new home sales will be released on Thursday. The housing slump will continue to weigh on the nation¡¯s economy and therefore put pressure on the Fed to cut rates.

Interest rate futures indicate that traders are pricing in a nearly 90 percent chance that the Fed will cut rates by a quarter percentage point to 4.50 percent at its Oct 31 policy meeting.