US economic downturn decelerating as trade balance stabilizes – bullish for US Dollar
Sam Adelton
May 4, 2008

The US economy is still weak but the worst is over from the mortgage and real estate melt downs. Service industries in the U.S. probably contracted for a fourth month and pending home resales fell, signaling the real estate slump and credit crisis continues to depress growth. However, the report will show that the data is better than the market expects. Fed actions and fiscal stimulus package is working for the time being.

The Institute for Supply Management's non-manufacturing index, which makes up almost 90 percent of the economy, dropped to 49.0 in April from 49.6, according to the market expectations. The data might come at 49.6 or above which will another signal that the economy is turning around from one of the worst slumps.

A report from the National Association of Realtors on May 7 may show its index of pending home sales fell 0.8 percent in March, after a 1.9 percent drop the prior month. It will be another sign that housing problems are not over but the worst in real estate may be behind us.

At the same time, the data will show that the US trade balance has stabilized and is actually improving. All this is bullish for US Dollar.

US economic downturn decelerating as trade balance stabilizes – bullish for US Dollar
Sam Adelton
At the same time, the data will show that the US trade balance has stabilized and is actually improving. All this is bullish for US Dollar.
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