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Home buyers drive record setting numbers for May

USD - United States Dollar

Pending home sales in the US spiked a record 44% after two months of declines because of the COVID-19 shutdown.

According to the National Association of Realtors (NAR), the Pending Home Sales Index rose 44.3% in May and was the highest month-over-month gain since NAR started tracking pending home sales in 2001.

The index measures the change in the number of homes under contract to be sold but still awaiting the closing transaction. The index is considered a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect, like renovations, mortgage services and other transactions.

Key Movers

The pound has started the week on the back foot with GBP/USD falling back towards 1.23 and GBP/EUR dropping under 1.10 for the first time since March. The pound is susceptible to risk off moves and with stock markets falling at the end of last week it’s not surprising the pound has taken a bit of a hit. Also, slowly creeping back into the headlines is Brexit with a large gap existing between the UK and EU over the terms of its future trading arrangement. As long as Coronavirus continues to remain under control in the UK, then Brexit will become more of a driver for the pound as we head deeper into 2020 with only just over six months before we are set to leave the bloc with or without a trade deal done.

Equity markets took a hit of late over concerns of the rising number of cases of COVID-19 in the US. The Dow Jones Index dropped over 2500 points through June as investors shifted into more traditional haven assets such as gold and the yen. The euro has held up relatively well, enjoying a semi-haven status with EUR/USD keeping above 1.12 and pushing higher against the GBP too.

Expected Ranges

USD/CAD: 1.365 - 1.370 ▲

GBP/USD: 1.225 - 1.238 ▲

EUR/USD: 1.121 - 1.128 ▼

USD/AUD: 1.452 - 1.461 ▲