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FOREX-Dollar rises versus euro, yen after housing data

Published 06/30/2009, 09:46 AM
Updated 06/30/2009, 09:49 AM

(Adds comments, details)

By Vivianne Rodrigues

NEW YORK, June 30 (Reuters) - The dollar rose against the euro and the yen on Tuesday after a report showed a smaller-than-expected dip in U.S. home prices in April, suggesting some stabilization in the housing sector.

Analysts said the dollar is beginning to benefit from an upbeat view on the prospects of a nascent global economic recovery, as well as from gains in stocks and commodity prices.

"The dollar is starting to react positively to good economic news which is a bit of a sea change from recent weeks," said Andrew Wilkinson, a senior market analyst at Interactive Brokers, in Greenwich, Connecticut. "Typically recovery would harm the dollar."

According to Standard & Poor's/Case Shiller home price indexes, prices of U.S. single-family homes of 20 metropolitan areas dipped only 0.6 percent in April from March, after a 2.2 percent decline the month before.

The dollar reversed earlier losses against the euro and the yen and advanced after the report. The euro touched a session low of $1.4059after the data, but last traded little changed at $1.4074. The dollar was last trading 0.2 percent up against the yen at 96.33 yen from about 96.13 earlier.

"Based on the Case-Shiller reports, traders are taking comfort in the fact that the overall package of government measures is working," said Wilkinson. "As the economy moves away from its nadir, the dollar is being bought." (Additional reporting by Gertrude Chavez-Dreyfuss)

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