Dollar Rally Fades as Home Sales Disappoint and Other Top Forex News
New York (Feb 21) The dollar rally faded today but remained in positive territory against most of the other major currencies after U.S. home sales data missed expectations, fuelling concerns over the strength of the country’s economic recovery.
U.S. existing home sales declined 5.1% to 4.62 million units last month, compared to expectations for a 4.3% drop to 4.68 million units according to National Association of Realtors data.
Existing home sales were also revised down to 0.8% a rise of 487 million units from an initially estimated 1% increase.
During todays U.S. session the dollar came off a high of 102.84 against the Japanese yen, after the release of this mornings housing data.
The greenback rallied against the yen overnight, after the Bank of Japan said its stimulus program could continue for longer than the two years initially anticipated.
USD/JPY ended the session up 0.29% to 102.57.
Meanwhile, the single currency ended the week little changed against the euro, with no data releases to support it. EUR/USD ended the session up 0.17% at 1.3743.
The pound also held steady against the dollar despite data showing that U.K. retail sales fell by 1.5% in January, more than the expected 1% decline. Retail sales in December were also revised down to a 2.5% increase from a previously estimated 2.6% gain.
A separate report showed that public sector borrowing in the U.K. fell by £6.4 billion in January, confounding expectations for a £9 billion decline. Public sector net borrowing for December was revised down to a £9 billion increase from a previously estimated £10.4 billion jump.
GBP/USD ended the session down 0.06% at 1.6641.
Elsewhere, the greenback strengthened against the Australian and New Zealand dollars, with AUD/USD declining 0.43% to 0.8967 and NZD/USD shedding 0.32% to 0.8278.
And the Canadian dollar came under pressure after official data showed that core consumer price inflation, which excludes the eight most volatile items, rose 0.2% in January, more than the expected 0.1% uptick, after a 0.4% fall the previous month.
Consumer price inflation gained 0.3% last month, exceeding expectations for a 0.1% rise, after a 0.2% slip in December.
While a separate report showed that retail sales in Canada dropped 1.8% in December, compared to expectations for a 0.5% fall. In November, retail sales were revised to a 0.5% rise, from a previously estimated 0.6% increase.