The US dollar and Japanese yen gained against many of the other majors on Wednesday as carry trades eased back and US equities drifted marginally lower. There were no headline economic indicators released, but there was a report circulating that reflected the feeble status of the real estate sector. Reis Inc. said that office vacancies rose to a five- year high of 16.5 percent from 13.7 percent, while effective rents, the amount paid by tenants, fell by 8.5 percent from a year ago, the biggest drop since 1995. Given the amount of job losses throughout the US, but more specifically, the financial sector, it’s not entirely surprising to see that businesses are cutting back on the amount of office space they need. Nevertheless, the rise in vacancies and drop in rents just serves as additional evidence that property values remain under serious pressure, regardless if the property is residential or for business.
Thursday will be another quiet day for US event risk, but with two rate decisions due out from the European Central Bank and Bank of England, there will be plenty of other news to drive price action across the majors.
Al Bawaba
