Forex - Dollar trades mixed on conflicting housing data

Published 09/19/2012, 09:52 PM
Updated 09/19/2012, 09:53 PM
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Investing.com - The dollar traded mixed against most major currencies on Wednesday after U.S. housing data released earlier exceeded expectations thought still left investors unsure if the industry has finally turned a corner towards more sustained recovery.

In Asian trading on Thursday, EUR/USD was down 0.03% at 1.3045.

The National Association of Realtors reported that existing home sales in the U.S. rose by 7.8% to a seasonally adjusted 4.82 million units in August, surpassing market expectations for a 2% increase to 4.55 million units.

Groundbreaking on new homes, however, rose less than expected in August, while building permits issued declined.

In a report, the U.S. Census Bureau revealed that U.S. housing starts rose by 2.3% in August to a seasonally adjusted 750,000, below expectations for an increase to 765,000.

The report also showed that the number of building permits issued in August fell 1% to a seasonally adjusted 803,000, compared to expectations for a decline of 1.8% to 796,000.

While investors agreed the data showed continued improvement in U.S. housing, most agreed it is still way too early to claim victory for the sector.

Credit still remains tight and millions of homes coming off foreclosure are due to hit the market in the near future, which will hamper recovery.
 
Meanwhile in Europe, reports surfaced that German lawmakers are seeking to water down proposals for a European banking union and supervision of eurozone banks by the European Central Bank.

Dow Jones Newswires reported earlier that the German government not only wants a strict separation of bank supervision and monetary policy in Europe, but also favors a separate bank-supervision body that would give large countries more votes.

Meanwhile, investors continue to battle uncertainty surrounding Spain and its plans to request assistance from the European Central Bank's new bond-buying program.

The dollar saw some support on the Bank of Japan's decision to increase the size of its monthly bond purchases by JPY10 trillion to a total of JPY80 trillion.

The JPY10 trillion increase in the asset-purchase program will be split equally towards additional purchases of treasury discount bills and Japanese government bonds, the central bank said in a statement.

The BoJ also left its policy interest-rate target unchanged in the current range of zero to 0.1%
However, monetary easing measures are underway in the U.S. as well, which kept the yen firm against the greenback at times.

Elsewhere, the Bank of England released the minutes of its August meeting, which revealed that policymakers voted 9 to nothing in favor of leaving U.K. interest rates unchanged at 0.5% and also agreed to leave the quantitative easing program unchanged at GBP375 billion.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.08% at 1.6235.

The dollar was flat against the yen, with USD/JPY trading unchanged at 78.38, and down against the Swiss franc, with USD/CHF trading down 0.05% at 0.9278.

The dollar was mized against its cousins in Canada, Australia and New Zealand, with USD/CAD trading up 0.10% at 0.9754, AUD/USD down 0.10% at 1.0468 and NZD/USD trading up 0.30% at 0.8293.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.03% at 79.20.









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