Dollar slips after US pending home sales disappoint

December 31, 2013

Frankfurt (Dec 31)  The dollar dipped against the euro and other major currencies Monday after a disappointing report on US pending home sales.

The euro rose to $1.3800 around 2200 GMT, up from $1.3743 at the same time Friday.

The dollar inched down to 105.11 yen from 105.13 yen, while the euro gained ground against the Japanese currency, fetching 145.05 yen compared with 144.47 late Friday.

US pending home sales rose for the first time in six months in November, according to the National Association of Realtors, but the gain -- 0.2 percent -- was much smaller than the expected 1.5 percent rise.

US dollar traders may be focusing on the continued pace of the Federal Reserve's tapering of its monthly asset purchases, which trims $10 billion a month in stimulus beginning in January, noted Benjamin Spier of DailyFX Research.

"Fed Chairman Bernanke mentioned the end of 2014 as a possible end to stimulus, but he said it will depend on upcoming data releases. If the Fed decides to slow the pace of the taper, the US dollar may decline," he said in a research note.

"Therefore, worse than expected economic releases like today's pending home sales may give reason for traders to sell the greenback in forex markets."

Trading remained thin ahead of the New Year's Day holiday on Wednesday, exaggerating some of the currency movements, said Omer Esiner of Commonwealth Foreign Exchange.

The dollar weakened against the Swiss and British currencies. The greenback fell to 0.8877 Swiss franc from 0.8913 Friday, and the pound rose to $1.6497 from $1.6475.

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