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Video for May 19th, 2008 (3 min 30 sec): Better Than Expected Leading Index Boosts US Stocks and Dollar 

UK Rightmove House Price Index Increases 1.2%

The Rightmove housing index rose 1.2% in May, though the index was driven up by selling of larger homes in the south, which happens annually in springtime. Six out of 10 regions still experienced declines, and the potential pool of buyers remains small as mortgage lenders make it harder to finance mortgage loans. The report believes that home sellers should price their properties more realistically, in order to "help affordability."

US Leading Index Improves 0.1%, Better Than Expected

The US conference board leading index showed a 0.1% increase for April, matching March's figure. Prior to March, the index had been running in negative territory for 5 months. Though growth remains weak in the US, the report implies that the economy should not be getting any weaker in the months to come.

EUR/USD - Stronger Leading Index Data Extends Dollar Rally

 

The Euro-Dollar pair dipped in favor of the Dollar today after it had strengthened to end last week on poor US consumer confidence data. Today's report helps to push the narrative that the US economy may be bottoming out while recent data from the Euro-zone suggests that the European economy may falter in the 2^nd quarter. The pair tested 1.55 and was trading there as of 2PM EST.

GBP/USD - Dollar Pares Friday's Losses vs Pound 

 

The Dollar gained on the Pound as well, following an intra-day high in European trading. From that high the Pound-Dollar pair slid about 150 pips testing support at 1.9450. This move pared Friday's gains.

USD/JPY - Positive Stocks Help Dollar vs Yen

 

Global stock markets performed well, and US stocks responded favorably to the leading index data. The Dow Jones index was up 125 points as of 2 PM, but came down following that. The increase in investor sentiment helped the Dollar-Yen pair reclaim its losses from Friday's session. As the stock rally cooled the pair set an intra-day high and began to reverse.

USD/CAD - Greenback Falls Lower Below Parity vs Loonie on High Oil

 

The Canadian Dollar managed to gain on the greenback as oil prices reached above $127 per barrel earlier in the day. Since Canada is the world's 8^th largest exporter of oil, high oil prices help increase the value of the Loonie. The Canadian Dollar-US Dollar pair fell below .99 in NY trading.

AUD/USD - Aussie Sets New 28-Year High

 

In today's session the Australian Dollar-US Dollar pair hit a new 28-year high* as commodity prices for the country's exports continue to increase. After setting the new high at 0.9567, the pair retreated to test 0.95. Meeting minutes from the Reserve Bank of Australia, which come in the evening, may have downside risk for the Aussie, as the bank has recently been less hawkish in the face of weakening growth.

*(correction - AUD/USD hit a 24-year high, not 28-year high) 

Upcoming Releases

Other than the RBA meeting minutes tonight, Japan releases an an industrial activities index. Other releases overnight include a measure of services in Japan, along with the Bank of Japan interest rates decision. Both Germany and Switzerland will post producer prices. The Euro-zone and Germany will unveil their "ZEW" economic sentiment. Tomorrow, Canada will release a report on foreign flows and wholesale sales. The US finished the session off with data on producer prices.