Forex Trading And Housing Sector Data

The housing sector is one of the most important sector of any economy. Recession in the U.S. started when the housing sector and real estate bubble burst in 2006. This started the sub prime mortgage crisis and eventually to the stock market crash 2008th So you can imagine the importance of the housing sector for the financial markets. Now, the housing sector is an important sector that affects the interest rate policy of any central bank. These interest rate changes affect virtually all financial markets, including currency market. High interest rates and currency prices low interest rates depreciates the currency.

As a forex trader, you need to predict these changes in interest rates. The best way to predict changes in interest rates by looking at the housing sector. Now, the housing sector is a reliable indicator in almost every country that has a floating currency.

The housing sector has been associated with dozens of other sectors in the economy. When the housing sector slows, it tends to slow down other sectors as well. This general slowing economy forces the central bank to cut interest rates to stimulate economic activity. In the same way, when the housing sector overheats, it causes inflation in the economy. Central banks have a mandate to control inflation. They are forced to raise interest rates. So looking at the housing sector data, you can easily form a picture of the expected interest rate changes in the economy. Interest rates are very important for the foreign exchange market. If you can anticipate change interest rates ahead of time, you can do a lot of winning trades.

for the design of its market sentiment about the U.S. Dollar, you can continue to look at the housing stock. Housing stocks can give you an important clue about the prevailing trend in the U.S. housing sector. Now, KB Homes is a leading indicator of single family homes in the United States. KB Homes stock price may be considered as a leading indicator of the strength or weakness in the housing market.

Take the case of the British pound and U.S. dollar GBPUSD. strong upward trend in the GBPUSD currency pair began in July 2006 that lasted for many many months. This improvement went to historic highs, reached its peak in 2007 and thereafter began retracement.

cause of the decline in housing prices, after ten years of boom. The direction of GBPUSD pair after a significant slowdown in property prices and mortgage approvals in the UK. Now you can use housing data in the trading of Australian dollar (AUD) as well. This statement Bloomberg can give you a clue to how important the housing sector may be for AUD ". AUD rose, reversing losses after a government report showed home building approvals unexpectedly surged in November, the highest in nine months

Similarly, if you trade the Japanese Yen (JPY), you will find Japanese housing data as an important factor in shaping the expectations of the Japanese economy. Also, no matter what you pair it stores the New Zealand dollar (NZD) and Canadian dollar (CAD), housing start data is a leading indicator of whether the economy is in decline, or stop growing.