Investing.com - The greenback moved higher against most major currencies on Monday as expectations held firm the Federal Reserve will conclude a policy meeting this week by reducing its USD75 billion monthly bond-buying program though soft housing data watered down the greenback's gains.
U.S. trading on Monday, EUR/USD was down 0.03% at 1.3673.
The Federal Reserve will conclude a monetary policy meeting on Wednesday, and investors remained bullish on the greenback amid expectations that monetary authorities will make fresh cuts to its USD75 billion in monthly bond purchases due to several months of improving U.S. economic indicators.
Stimulus tools such as Fed purchases of Treasury holdings and mortgage debt suppress interest rates to spur recovery, thus weakening the dollar as long as they remain in effect, while talk of tapering the program strengthens the U.S. currency.
The greenback rose against the yen earlier though soft U.S. housing data prompted a pause in the greenback's gains.
The Census Bureau reported earlier that sales of new, single-family houses in December came in at a seasonally adjusted annual rate of 414,000, missing market calls for a 475,000 reading and also below November's revised figure of 445,000, which softened the dollar.
The figure was still well above the December 2012 reading of 396,000, and the data also revealed that inventories remain lean and prices continue rising, which softened the report's bearish impacts on the dollar.
Harsh winter weather may have affected sales in December as well.
Meanwhile in Europe, German research institute Ifo reported earlier that its business climate index rose to 110.6 in January, beating forecasts for a 110.0 reading and up from 109.5 in December, indicating that businesses in the euro zone’s largest economy had a strong start to the year.
Also in Europe, the head of the eurogroup of finance ministers Jeroen Dijsselbloem said earlier that turmoil in emerging market economies won't affect the euro zone's recovery.
The euro rose earlier though it gave back gains later as markets focused on the Federal Reserve.
The greenback was down against the pound, with GBP/USD up 0.61% at 1.6582.
Improving U.K. unemployment data have fueled expectations that the Bank of England may raise interest rates sooner than anticipated.
The dollar was up against the yen, with USD/JPY up 0.34% at 102.69, and up against the Swiss franc, with USD/CHF up 0.30% at 0.8970.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 1.1096, AUD/USD up 0.85% at 0.8757 and NZD/USD up 0.41% at 0.8248.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.02% at 80.57.
On Tuesday, the U.S. is to release data on durable goods orders, a leading indicator of production, as well as what will be a closely watch report on consumer confidence.