Investing.com -- The U.S. dollar enjoyed its highest one-day move against the euro in months on Tuesday, as the timing of a rate hike by the Federal Reserve and a potential breakthrough in Greek Debt negotiations remained in focus.
EUR/USD plummeted 0.0173 or 1.53% to 1.1168, experiencing its largest one-day sell-off on a percentage basis since March 19, when it tumbled 1.90%. At one point in Tuesday's session, the euro plunged to 1.1135, its lowest level in nearly three weeks. After reaching a monthly high at 1.1438 last week, the euro continued its retreat against the dollar on Tuesday closing lower for the third time in four session. The pair has not eclipsed 1.15 since Feb. 3.
EUR/USD likely gained support at 1.1080, the low from June 8 and was met with resistance at 1.1411, the high from June 22.
The dollar surged on Tuesday morning following hawkish comments from Fed governor Jerome Powell on the timing of the Fed's first interest rate hike in nearly a decade. Appearing on a panel discussing monetary policy in Washington, that there is a 50/50 chance lift-off could occur at the FOMC's September meeting, followed potentially by another rate hike in December. In addition, Powell said that while transient effects from severe winter weather pulled down inflation in the first quarter, it could still reach the Fed's targeted goal of 2% by the end of 2015, as the dollar and oil prices stabilize.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, soared to an intraday high of 95.88 experiencing its highest one-day move in more than three weeks, before falling back slightly to 95.63, up 1.17%.
On Tuesday morning, the U.S. Commerce Department said in a monthly report that New Home Sales surged by 2.2% in May to a seasonally-adjusted 546,000 reaching its highest level since February, 2008. The figures underscore resilience in the real estate market, one day after a monthly report indicated that Existing Home Sales jumped more than 5% last month. The Commerce Department also upwardly revised April's total by 27,000 to 534,000, representing a prodigious 8.1% gain. Separately, the Federal Housing Financing Agency's House Price Index ticked up 0.3% in April rising modestly for the second straight month.
Meanwhile, the Richmond Manufacturing Index gained five points in June bolstered by a surge in new orders. Unexpected declines in Durable Goods Orders and a lower-than-expected reading of the PMI Manufacturing Index, however, weighed on the dollar.
USD/JPY gained 0.45% to 123.94, while USD/CAD rose 0.20% to 1.2333
One day after European leaders expressed hope that a deal for a temporary Greek bailout could be reached later this week, leftist demonstrations in support of the Syriza government continued in Athens. On Monday evening, European Commission president Jean-Claude Juncker said he was confident that the euro group can finalize the decision-making process later this week after Greece took major steps to meet the expectations of its troika of its creditors with its latest proposal submitted on Sunday. The proposal includes raising early retirement age provisions to 67 and imposing higher Value-Added Taxes.
Yields on U.S. 10-Year Treasuries rose four basis points to 2.41%, while yields on German 10-Year bunds fell one basis point to 0.87%.