A long winning streak for the greenback versus currencies like the euro and the Aussie dollar was stopped after a housing report was published today bringing rather negative figures much below estimates, providing support for other currencies to pare losses versus the U.S. dollar.
The dollar declined sharply versus the yen and the Swiss franc after several days rallying versus most of the 6 main traded currencies after a new home sales report indicated much worse numbers than the previous report and forecasts, emerging doubts regarding the pace of recovery for the world’s wealthiest economy, as traders use the circumstances to take profit and repatriate capital invested in the dollar after a rally that started in the beginning of the month when positive reports fueled speculations that interest rates could be hiked sooner than expected by the Federal Reserve.
Not all sectors of the U.S. economy are providing optimistic data, according to analysts. Today’s movement is a combination of consequences caused by the negative housing report, but also a natural correction after so many days of gains for the greenback, as some speculative positions are sold.
EUR/USD traded at 1.4346 as of 17:32 GMT from a previous reading of 1.4251 yesterday. USD/CHF traded at 1.0368 from 1.0489 yesterday.
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