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Dollar index erases gains after downbeat U.S. housing report

Published 09/28/2015, 10:40 AM
© Reuters.  Dollar pulls away from session highs as U.S. housing data disappoints
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Investing.com - The dollar erased gains against the other major currencies on Monday, after data showed that U.S. pending home sales dropped unexpectedly last month, although comments by Federal Reserve official William Dudley added to expectations for a near-term U.S. rate hike.

EUR/USD was steady at 1.1200, off lows of 1.1147 hit earlier in the session.

The U.S. National Association of Realtors said that pending home sales dropped 1.4% in August, confounding expectations for a 0.4% uptick after a 0.5% rise the previous month.

Earlier Monday, the U.S. Bureau of Economic Analysis reported that personal spending rose 0.4% in August, beating expectations for an increase of 0.3%. Personal spending rose 0.4% in July, whose figure was revised from a previously estimated 0.3% gain.

The report also showed that personal income increased by 0.3% last month, compared to expectations for a 0.4% gain. Personal income rose 0.5% in July, whose figure was revised from a previously estimated 0.4% increase.

Meanwhile, New York Federal Reserve Bank President William Dudley said the Fed remains on track for a rate hike this year and could move as soon as the upcoming meeting in October.

The comments came after Fed Chair Janet Yellen said last Thursday that the U.S. central bank was likely to raise interest rates in 2015.

The dollar was lower against the yen, with USD/JPY down 0.54% at 119.85.

Demand for the safe-haven yen strengthened after International Monetary Fund head Christine Lagarde said in an interview on Monday that the IMF is likely to revise downwards its estimates for global economic growth due to slower expansion in emerging economies.

Elsewhere, the dollar was lower against the pound and the Swiss franc, with GBP/USD adding 0.11% to 1.5196, and with USD/CHF shedding 0.28% at 0.9753.

The Australian and New Zealand dollar remained weaker, with AUD/USD down 0.30% at 0.7005 and with NZD/USD retreating 0.67% to 0.6342.

Meanwhile, USD/CAD was little changed at 1.3339, still close to last week's six-year peak of 1.3417.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.09% at 96.29, after reaching highs of 96.67 earlier in the day.

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