Monday, 19 Jul 2010

Dollar Turns Down after U.S Housing Report

The U.S currency fell against the EUR Monday, after a weak U.S. report on the housing sector and as the shared currency shrugged off an unsurprising downgrade of Ireland's credit rating. The greenback got hit hard at the end of last week, reflecting growing investor concern about the U.S. economic outlook.

Although the Dollar briefly pared its losses against the shared currency, it turned lower again after the National Association of Home Builders/Wells Fargo housing-market index fell to 14 in July from a downwardly revised 16 in June. Analysts said that the greenback has been undermined by the specter of a return to quantitative-easing measures by the Federal Reserve, ensuring that investors will pay close attention to congressional testimony Wednesday by Fed chief Ben Bernanke. Market players also await the results of stress tests on 91 European banks due on Friday. The EUR is likely to come under renewed pressure as the market is reminded that access to financial support and bailout packages is not automatic and contingent on strict fiscal targets being achieved.