Forex - Dollar gains on improving U.S. confidence, housing data

Written By Unknown on Rabu, 26 Juni 2013 | 08.10

Investing.com - The dollar strengthened against most major currencies on Tuesday after better-than-expected consumer confidence and housing data stoked already growing expectations that the Federal Reserve will begin to scale back stimulus programs in the coming months.

Monetary stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling can strengthen the U.S. currency.

In U.S. trading on Tuesday, EUR/USD was down 0.22% at 1.3092.

Data released earlier revealed that U.S. consumer confidence rose to its highest level since January 2008 this month.

The Conference Board said its index of U.S. consumer confidence rose to 81.4 in June from 74.3 in May, well above expectations for a reading of 75.4.

In a separate report, the Commerce Department said U.S. orders for durable goods rose 3.6% in May, outstripping expectations for a 3.0% gain.

Positive data from the housing market sent the dollar gaining as well.

The Commerce Department said U.S. new home sales rose by 2.1% to 476,000 units in May, the highest level since July 2008 and well above expectations for an increase of 1.3% to 462,000.

Home prices are on the rise as well.

The Standard & Poor's/Case-Shiller 20-city house price index rose 12.1% in April from a year earlier, above expectations for a 10.6% increase.

U.S. home prices in March rose by 10.9%.

The greenback was up against the pound, with GBP/USD trading down 0.08% at 1.5422.

The dollar was mixed against the yen, with USD/JPY up 0.02% at 97.76, and up against the Swiss franc, with USD/CHF trading up 0.51% at 0.9382.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.17% at 1.0517, AUD/USD up 0.19% at 0.9266 and NZD/USD trading down 0.14% at 0.7741.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.19% at 82.79.

On Wednesday, the U.S. is to release revised data on first-quarter economic growth as well as government data on crude oil stockpiles.

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