Dollar Weakens on Pending Home Sales, Dubai Rescue

The dollar had another day of negative performance versus the euro and most of high-yielding currencies this Tuesday as home sales in the U.S. improved and Dubai World’s debts are likely to be rescue by the Abu Dhabi sovereign financial authority.

The U.S. dollar is having a negative start of the week posting its second consecutive day of losses versus most of the 16 main traded currencies as risk appetite returned to markets declining attractiveness for the U.S. currency, as concerns regarding the state-owned investment agency Dubai World decreased, as most of its debts will be backed by the U.A.E. central bank, according to an announcement made yesterday. U.S. home resales increased beyond forecasts increasing risk appetite among traders globally as the real estate market in the U.S. was one of the key-factors causing the global slump last year. The Australian dollar gained massively versus its U.S. counterpart as the South Pacific nation raised interest rates for the third time consecutive this semester.

After the negative days in equities and commodities markets declining risk appetite caused by concerns regarding the Dubai debt case, risk is on again, and that’s negative for the U.S. dollar, according to most traders. The Australian dollar is likely to set a new record versus the greenback as interest rates continue to be hiked and risk driven purchases are helping the Aussie to gain.

EUR/USD traded at 1.5111 as of 16:38 GMT from a previous rate of 1.5001 yesterday. AUD/USD traded at 0.9250 from 0.9153.

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