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Currencies AUD Dollar Slips After Consumer Data Disappoints and Other Top Forex News.

The U.S. dollar extended losses against most of the major currencies on Tuesday after official data showed that U.S. consumer confidence deteriorated in February.

The Conference Board reported that its consumer confidence index declined to 78.1 in February, down from 79.4 in January, amid concerns over the short-term outlook for business conditions, jobs, and earnings. Confounding analysts expectations of a tick up to 80.0.

The present situation index rose to its highest level in almost six years, but the expectations index declined, indicating that while consumers believe the economy has improved they do not foresee further considerable improvement in the coming months.

In other news, house prices rose 0.8% in December, down from 0.9% growth in November, indicating that the recovery in the housing sector may be slowing.

However, the Standard & Poor’s/Case-Shiller house price index rose 13.4% in December from a year earlier, the best December reading in eight years and slightly ahead of forecasts for a 13.3% gain.

During the U.S. session the dollar fell against the yen. USD/JPY hit a low of 102.01, the lowest since February 20 before closing at 102.16, a loss of 0.34%.

The safe haven yen continued to find support after China’s yuan posted the largest one-day decline in three years on Tuesday, amid speculation that the country’s central bank had intervened to add volatility to the currency ahead of possible economic reforms.

While the euro climbed against the dollar after the European Commission revised up its 2014 growth forecast for the euro zone to 1.2%on Tuesday, up from 1.1% in November.

The EC also cut its inflation forecast for this year to 1% from 1.5% in November and warned that debt levels in several countries will continue to climb.

EUR/USD climbed by 0.05% to 1.3742, down from a high of 1.3766.

Sterling also found support this morning climbing to a high of 1.6723 against the dollar, after data from the British Bankers Association showed that mortgage approvals rose 57% in January from a year earlier, hitting a 76-month high.

A separate report by the Confederation of British Industry said U.K. retail sales rose at the fastest rate since June 2013 in February.

GBP/USD ended the session up 0.14% at 1.6678.

Elsewhere, the Australian and New Zealand dollars both lost ground after speculation that China’s Central Bank had intervened in markets to add volatility to the currency ahead of possible economic reforms.

AUD/USD fell 0.21% to 0.9016 at the close, while NZD/USD closed virtually unchanged up just 0.01% at 0.8333.

Finally, the Canadian dollar was down slightly on the day, but within recent ranges amid a dearth of economic data or other news to impart some movement to the currency.

USD/CAD ended the session up 0.18% at 1.1082.

More coverage of today’s session.

  • FT: Japan shifts agenda as Abe’s arrows miss. – During New Year’s week in Tokyo, workers carefully penned their wishes for salary hikes in 2014 and tied the small pieces of paper on which they wrote to trees in the grounds of the city’s many temples. Meanwhile, their bosses dug up records going back almost two decades for information on formulas governing any potential increase in wages.
  • FT: Pace of gains in U.S. house prices slows. – The US saw the fastest annual house price growth in eight years in 2013 but momentum in the country’s housing market is beginning to slacken, data on Tuesday showed.

More Top Stories: 

Dean Popplewell: What’s the EUR to do – ignore the soft facts? – It seems that Wall Street has apparently decided to ignore the run of current weak US data due to the bad weather and instead gladly focus on M&A activity across the developed stratosphere in belief that all is well in capital markets. This week’s sharp turn higher in investors risk appetite is helping the likes of commodity prices to once again find firmer footing.

Dean Popplewell: GBP/USD – Pound choppy at start of week. – GBP/USD has shown some movement in both directions on Monday, but has been unable to sustain any momentum. In the North American session, the pair is trading in the mid-1.66 range.

WSJ: Is the euro worth 38% more than the dollar? – The value of a currency is determined by its comparison to another currency. In the current globalized world, it’s no longer desirable for a currency to be too strong at all costs. What really matters is that its exchange rate may stay near an appropriate level, and thus help to achieve the commercial and financial goals of a country.

FT: Long winter leaves dollar bulls shivering. – It has been a tough winter for dollar bulls. The polar weather that shut down transport, shops and factories in the US has also put a freeze on the rally in the greenback that many currency investors had made their central call for 2014.

WSJ: Canadian dollar down slightly, but within recent trading range. – The Canadian dollar was down slightly Tuesday morning, but remained within recent trading ranges amid a dearth of economic data or other news to impart some movement to the currency.

WSJ: China weakness restrains Australian dollar. – The Australian dollar’s latest rise above US$0.9000 faded in Asian trading Tuesday as China’s currency and share market weakened sharply.

WSJ: New Zealand dollar higher but Yuan weakness weighs. – New Zealand–The New Zealand dollar was higher against its U.S. counterpart late Tuesday, although weakness in the Chinese yuan was weighing on the local currency.

MarketWatch:Gold futures finish up, hold 4-month high. – Gold futures finished higher on Tuesday to hold their ground at their highest level in four months, finding some modest support from a weaker-than-expected reading on U.S. consumer confidence.