Upbeat Data Boosts Dollar and Other Top Forex News.
The dollar moved into positive territory against most of the other major currencies on Tuesday following the release of U.S. consumer confidence and new homes sales data, both of which hit six year highs, bolstering the outlook for the wider recovery.
The first of this mornings releases from the Conference Board showed that the consumer confidence index jumped to 85.2 in June from 83.0 last month, the highest reading since January 2008.
While a separate report showed that the number of new home sales also rose to a six-year high, surging 18.6% in May to an annual rate of 504,000. It was the highest level since May 2008 and the largest monthly increase since January 1992.
Following the release, the dollar erased the euro’s gains against the dollar and continued to strengthen against the yen.
EUR/USD closed the session unchanged at 1.3602, down from a high of 1.3629 and USD/JPY closed up 0.04% at 101.97.
Earlier the dollar had weakened following news that U.S. single-family home prices rose less than expected in April.
In the euro-zone, official data showed that German business confidence deteriorated this month, amid concerns about the impact of crises in Iraq and Ukraine.
The German Ifo business climate index fell to a six-month low of 109.7 this month from 110.4 in May and compared to estimates of 110.3.
While the pound touched fresh session lows after dovish comments by Bank of England Governor Mark Carney tempered expectations for a U.K. rate hike this year.
In testimony to parliament’s Treasury committee, Carney said that recent wage growth has been lower than expected, which could indicate there is more slack in the U.K. labor market than previously thought.
GBP/USD closed the session down -0.24% at 1.6986.
Elsewhere, the Australian dollar gave up this weeks gains against the greenback. The Aussie was boosted yesterday by strong Chinese Manufacturing data. But with no releases scheduled for today the aussie lost ground against the broadly strengthening dollar.
AUD/USD closed the session down -0.46% at 0.9381.
And the New Zealand dollar also fell from a two-month high amid speculation the European Central Bank will keep interest rates low for an extended period.
NZD/USD closed the session down -0.24% at 0.8691.
Finally the Canadian dollar eased back from five-and-a-half month highs against the greenback, as the U.S. dollar strengthened in the wake of strong housing sales and consumer confidence data.
USD/CAD closed the session up 0.07% at 1.0740.
More coverage of today’s session.
- FT: Mark Carney damps expectation of UK rate rise. – Sterling fell on Tuesday after Bank of England governor Mark Carney damped expectations of an imminent UK interest rate rise.
- Bloomberg: Consumer confidence in U.S. increases to highest since 2008. – Consumer confidence in the U.S. rose in June to the highest level in more than six years as an improving job market bolsters households.
More Top Stories:
Dean Popplewell: BoE double crosses long sterling positions. – Cable is on the move in the late European session, driven mostly by “dovish” comments from three MPC members to the UK’s Treasury Select Committee.
Marc Chandler: Slippery forward guidance spurs sterling profit-taking. – The emphasis on central bank forward guidance always seemed like shaky ground to rest monetary policy. After all, central bankers always tried to influence investor expectations. However, as the UK is amply demonstrating, what is euphemistically called “time inconsistency” may limit its effectiveness.
CTV News: Canadian dollar dips, greenback strengthens on solid housing, consumer data. – The Canadian dollar was lower Tuesday following four days of gains that lifted the currency to its highest level since early January.
TVNZ: NZ dollar falls from two-month high amid ECB report. – The New Zealand dollar fell from a two-month high amid speculation the European Central Bank will keep interest rates low for an extended period.
The Australian: Australian dollar falls from seven-month high. – The Australian dollar is backing away from its seven-month high but traders are confident that it will get up towards 95 US cents in the coming fortnight.
Bloomberg: Gold futures rise to two-month high on economic reports. – Gold rose to a two-month high as U.S. home prices rose at a slower pace than forecast and business confidence in Germany eroded, boosting the appeal of the metal as a haven. Silver climbed to the highest since March.