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US Dollar Index Flat after Mixed Housing Data

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US dollar index trading on a flat note

The US dollar index was trading flat for the day on October 20, 2015. The day saw housing starts come out above forecasts, and building permits for September came out below expectations. The markets seem to be waiting for direction from the European Central Bank (or ECB) press conference scheduled for October 22, 2015. The European policymakers are expected to push the euro further down with dovish comments.

The divergence in US and European monetary policies was the major reason for the euro losing ground to the US dollar since the ECB began its quantitative easing program of 60 billion euros. The US dollar index opened the day at 94.93 and closed just 0.02% lower at 94.91.

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Mixed housing data

The United States Census Bureau published the building permit numbers for September at 1.10 million, which was 5% below August’s revised figures. Housing starts rose by 6.5% from last month’s revised figures to 1.21 million, with single-family housing starts rising by 0.3%.

The report also indicated a month-over-month 7.5% rise in housing completions, with single-family housing completions falling by 1.8% from August’s figures.

Impact on the market

The mixed housing data had a positive impact on housing-related ETFs, with the SPDR S&P Homebuilders ETF (XHB) rising by 0.78%. The iShares US Home Construction ETF (ITB) also saw a significant rise of 1.3% on October 20, 2015.

Housing-related stocks were also on the rise, with Lennar Corporation (LEN) trading on a positive bias and rising by 2.8%. Toll Brothers (TOL) also posted gains, with a rise of 1.18% on October 20, 2015, and DR Horton (DHI) rose by 2.5%.

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