Currencies Consolidate despite Poor US Home Sales

The release of the US existing home sales figure today were very disappointing as they fell by 16.7% during December recording the sharpest drop in 40 years. With demand falling and housing stock rising, sellers will almost certainly have no choice but to consider dropping their prices further.

The EURUSD continued to consolidate its losses from last week even though German confidence fell for the fourth straight month to 3.2 from 3.4. These figures imply that investors are becoming increasingly concerned about the possibilities of a serious financial pullback. The EURUSD has tended to trade sideways throughout the day and currently posts 1.4150.

The GBPUSD has shown some strength today by rising to its current value of 1.6240. The advance reading of Q4 GDP will be released tomorrow and provide fresh clues about the state of the British economic recovery.