Key Forex Risks 21st August 2009

Today's release of US existing home sales could again still indicate a weak US housing market following on from the disappointing starts and building permits figures.

US Existing Home Sales records sales of previously owned homes which can be an important indicator of overall business conditions at times when housing is particularly important to the US economy.

However, as this report tends to lag market conditions, it usually does not affect the market as much as other key housing data.

This information will be released at 10am EST.

Without question, the main Forex event risk today will be Federal Reserve Chairman Ben Bernanke’s 10:00 ET speech at the Jackson Hole Conference.

The speech is entitled “Reflections on a Year of Crisis,” and could result in an increase in US dollar volatility. If the speech is of very neutral content then the US dollar could continue lower as a result.

Conversely, should the speech contain any economic worrying comments then it could initiate risk aversion that would benefit both the USD and YEN.

Low Forex Market Liquidity should restrict the risk of breakouts of any of the major currencies today.