Tuesday, 22 Dec 2009

Dollar Continues to Strengthen versus Major Rivals

The Dollar continued to appreciate today against most major currency counterparts as an industry report showed sales of existing homes increased last month more than economists estimated. The Dollar reached an intraday high against the EUR and Yen following the release of the November Existing Home Sales data. Sales rose 7.4%, a better then expected result.

The dollar retracted slightly after the release of disappointing grow data. GDP rose at a 2.2% annual rate July through September, after falling by 0.7% in the second quarter, the Commerce Department reported in its third GDP estimate. Last month, the department revised its 3rd quarter GDP growth estimate to 2.8% from an originally reported 3.5%.

The Pound dropped below $1.60 after the third quarter U.K. Gross Domestic Product (GDP) was revised up to show a decline of 0.2% from a 0.3% drop, a worse then expected result. Sterling dropped 0.3% to $1.5991 after trading at $1.61 earlier. It also weakened 0.3% to 89.26 pence per EUR.

The Dollar is also trading near a two month high versus the Japanese Yen as Bank of Japan Governor Masaaki Shirakawa confirmed that Japanese interest rates would remain near zero.