Existing Home Sales is an indicator that measures the number of already existing residential buildings that were sold during the previous calendar month. Being a key indicator of the housing market demand, the indicator is possible to affect the exchange rate of currency pairs with USD.
Why is it important?
Housing industry is one of the pillars of the American economy. Lower home sales inevitably lead to decreasing construction activity in the country. Real estate market is tightly connected to the economic conditions. When the national economy is standing on the verge of a crisis, a decline in the number of new house acquisitions can be expected. The indicator, therefore, can be used to predict the well-being of the American economy, which, in turn, affects the exchange rate of the USD.
Practical application
A higher than expected reading should be taken as bullish for the USD, while a lower than expected reading should be taken as bearish for the USD.
