Forex: U.S. Housing market still in a slump

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The latest data on existing home sales in the United States were released today by the U.S.Census Bureau. Figures indicate that the U.S. housing market crisis is not over yet, as February data reported worse than expected decline of 16.9% and a record low 250,000 annual rate. The market consensus estimated a 5.6% increase and a 300,000 unit for the annual rate.

The New York trading session opened down reacting to the data. Adding to the negative tone were concerns of the fragile situation in the Middle East and renewed Eurozone debt issues, primarily Portugal’s deficit. If the Portuguese parliament votes against the new budget, fear of debt contagion will return to the spotlight.

Despite the disappointing U.S. housing data, the Dollar only temporarily lost around 40 pips against the Euro a few minutes after 14:00 GMT but the greenback soon regained momentum again as the Portugal debt crisis weighs down the Euro. The EURUSD pair is currently trading at 1.4118, after hitting a European session high of 1.4247.