Investing.com - The dollar moved higher against the euro and most of the other major currencies on Wednesday after unexpectedly strong data on U.S. new home sales eased concerns over a slowdown in the economic recovery.
EUR/USD hit 1.3664, the weakest since February 13 and was last down 0.56% to 1.3667.
The dollar strengthened after the Commerce Department reported that U.S. new home sales rose 9.6% to 468,000 units in January, the largest increase in five-and-a-half years. Analysts had expected new home sales to fall 1% to 400,000.
New home sales in December were revised up to 427,000 units from a previously reported 414,000 units.
Investors were looking ahead to testimony by Federal Reserve Chair Janet Yellen on Thursday after a recent spate of disappointing U.S. economic indicators raised some doubts over whether the central bank will maintain the current pace of reductions to its stimulus program.
Ms. Yellen was expected to reiterate that the U.S. central bank would continue to roll back its asset purchase program, as long as the economy improves as expected.
The dollar rose to session highs against the Swiss franc, with USD/CHF advancing 0.59% to 0.8920.
USD/JPY edged up 0.09% to 102.32, recovering from Tuesday’s lows of 101.99.
Demand for the safe have yen continued to be underpinned amid concerns over the outlook for emerging markets. Russia’s rouble fell to a five year low against the dollar on Wednesday, driven lower by heightened political tensions in Ukraine.
Meanwhile China’s yuan was steady after falling to three-year lows against the dollar on Tuesday, amid speculation that the country’s central bank has intervened to add volatility to the currency ahead of possible economic reforms.
Elsewhere, GBP/USD was down 0.32% to 1.6627. Data released earlier Wednesday confirmed that the rate of economic growth in the U.K. was unrevised at 0.7% in the final three months of 2013, but the annual rate of growth was revised slightly lower.
Separately, two members of the Bank of England’s monetary policy committee reiterated Wednesday that the bank is planning to keep rates on hold for some time.
David Miles said recent falls in inflation meant there was less pressure to raise borrowing costs, while the bank’s chief economist Spenser Dale said it was not planning to raise rates any time soon.
The Australian dollar was lower, with AUD/USD down 0.59% to 0.8966, while NZD/USD lost 0.34% to trade at 0.8301.
The U.S. dollar edged higher against the Canadian dollar, with USD/CAD rising 0.11% to 1.1095.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.39% to 80.49.