Forex - Dollar falls as market looks past soft U.S. housing data

Published 09/26/2012, 09:56 PM
Updated 09/26/2012, 09:57 PM
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Investing.com - The dollar fell against most major currencies on Thursday, wiping out earlier gains posted earlier after weak housing figures broke in the U.S..

In Asian trading on Thursday, EUR/USD was up 0.05% at 1.2881.

The dollar rose in European and U.S. sessions earlier on soft home sales figures.

In the U.S. earlier, the Commerce Department reported that new home sales fell to a seasonally adjusted annual rate of 373,000 in August from 374,000 in July, whose figure was revised up from 372,000.

Analysts had expected new home sales to rise to 380,000 in August.

The news sent investors selling equities and higher-yielding currencies while stocking up on dollar positions, though profit taking sent the greenback falling in Asian trading on Thursday.

Solid housing numbers broke in the U.S. just a day earlier.

The Standard & Poor’s/Case Shiller House Price Index showed that home price in 20 cities rose 1.2% in July of this year compared with the same month a year ago.

Analysts had expected the closely watched gauge on home prices to rise 1.0% in July.

Elsewhere, the Conference Board, an industry group, reported that its consumer confidence index rose to 70.3 in September from an upwardly revised 61.3 in August.

September's reading was the highest since February and outpacing analysts' calls for a 63.0 reading.

The dollar continued to succumb to bearish pressures now that the Federal Reserve has begun to implement a third round of quantitative easing, under which the U.S. central bank will buy USD40 billion a month in mortgage-backed securities held by banks, pumping the financial system full of liquidity to spur recovery, weakening the dollar in the process.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.14% at 1.6188.

The dollar was down against the yen, with USD/JPY trading down 0.10% at 77.67, and down against the Swiss franc, with USD/CHF trading down 0.04% at 0.9389.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD trading down 0.20% at 0.9836, AUD/USD up 0.15% at 1.0387 and NZD/USD trading up 0.21% at 0.8260.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.09% at 79.83.

Later Thursday in the U.S, the government will publish data on durable goods orders, a leading indicator of production, as well as a weekly report on unemployment claims and revised data on second quarter economic growth.

The country will also release industry data on pending homes sales, a leading indicator of economic health.











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