The USD stumbled against the euro and the yen Friday, after a U.S. housing report cast doubt on the strength of the economic turnaround and called into question the prior week’s ascendancy in the U.S. currency. New home sales in the U.S. fell for the second consecutive month in February, helping push the euro up to its highest level in three weeks in Friday trading. The USD tumbled against the yen to below Y82 for the first time since March 13 before regaining some of its ground. The U.S. currency also touched its lowest level for the month against the CHF. The “relatively weak new home sales numbers…made the market worry a little about the sustainability of the recovery,” a broker said. “Once the stock market gathered some steam, risk appetite in general recovered, and the dollar clawed back some of its losses.”
The euro also got a boost from encouraging news in France, where business confidence jumped this month and the government’s statistics bureau late Thursday raised its forecast for the country’s growth, suggesting the euro zone’s second-biggest economy will avoid a recession this year. Late Friday in New York, the euro was at $1.3271 from $1.3201. Against the yen, the common currency was at Y109.35 from Y108.94.
Broadly speaking, the major currencies remained within their recent ranges for the week, as a mixed economic picture kept traders from placing aggressive foreign exchange bets. Markets may remain quiet in the coming weeks ahead of April payrolls data in the U.S., which investors will look to for a clearer indication of the strength of the job market. In general, improving U.S. economic data has helped boost bond yields, attracting investors to the dollar for much of the month. But the U.S. currency’s gains against the yen stalled this week after Japan posted a trade surplus, leaving analysts at odds over how much further the dollar can climb.
Currencies from commodities exporters had a strong day, led by a rebound in the Aussie, which gained 0.81% to $1.0473. The AUD had fallen earlier in the week on concern about a slowdown in China, the top customer for its steel and coal exports
EasyForexNews Research Team