Monday, 26 Jul 2010

Dollar Weakens On Better than Expected US New Home Sales Data

The Dollar fell today against most of the major currencies. The Dollar dropped close to 150 pips vs. the Euro and saw a 50 pips fall against the Pound. The Dollar also dropped about 100 pips against the Yen.

The Dollar's bearish trend came as a result of the U.S. New Home Sales report. The report showed that sales of new U.S. houses rose in June to 330.000, beating expectations for a 317,000 rise. The positive data increased optimism regarding the recovery pace of the U.S. economy, and as a result turned investors to look for higher-yielding assets, such as the Euro and the Pound.

Looking ahead to tomorrow, a batch of data is expected from the major economies. Traders are advised to focus on the U.S. Consumer Confidence report. This report is considered to be a leading indicator of consumer spending, and thus its results tend to have a significant impact on the market. A positive data might boost demand for risky assets further.