US Dollar Edges Higher on Strong Housing Data and Anticipation for French Election

The US dollar strengthened against the euro on Friday, following the release of positive data for the US housing sector. Investors are keeping a close eye on the French presidential election on Sunday, which weighed on the shared currency and gave way for the greenback to score more gains today.

The US National Association of Realtors released a report on existing home sales earlier today. The report said that sales rose 4.4% to 5.71 million in March, after decreasing 3.9% to 5.47 million in February. The fresh numbers exceeded expectations of a 2.5% gain to 5.60 million, to touch the strongest pace in more than 10 years.

On a yearly basis, existing home sales increased 5.9% in March, while the average price for existing homes also surged last month, scoring a 6.8% gain to $236,400 from $221.400 a year earlier. The data reflected improving conditions and demand in the real estate market, which supported the US dollar.

The housing data overshadowed a disappointing reading for the services and manufacturing purchasing managers’ indexes from IHS Markit. The financial information company said today that its services purchasing managers’ index declined to 52.5 in April from 52.8 in March, which missed estimates by 0.5. Meanwhile, Markit manufacturing purchasing managers’ index fell to 52.8 in the current month from 53.3 last month, which disappointed expectations of a reading at 53.5.

The euro came under pressure on Friday after a French policeman was killed in Paris last night in a terror attack that the Islamic State claimed responsibility for. The attack is the latest in a long list of other terror acts in France that took the lives of more than 230 people in the last two years.

The first round of the French presidential election is only a few days away, and recent polls forecast that voters might choose centrist Emmanuel Macron against Marine Le Pen, the far right candidate. However, markets are far from certain on who will win, as the race to the French presidency appears to be the most unpredictable in decades.

EUR/USD traded at 1.0703 as of 17:35 GMT on Friday from 1.0686 at 16:30 GMT, the pair’s lowest level since April 18. EUR/USD began trading today at 1.0713.

The Dollar Index, which tracks the performance of the greenback against its major peers, was at 99.88 as of 17:28 GMT today, from 99.77 yesterday.

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