Dollar gains as U.S. new home sales beat expectations

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Investing.com - The dollar firmed against most major currencies on Friday after data revealed more new homes were sold in the U.S. in April than markets were anticipating.

In U.S. trading on Friday, EUR/USD was down 0.18% at 1.3632.

The housing sector, which threw the U.S. economy into the worst downturn since the Great Depression and lagged on its recovery for years, is on the mend.

The Census Bureau reported earlier that U.S. new home sales rose 6.4% to 433,000 units in April from 407,000 units in March, whose figure was revised up from a previously estimated 384,000. Analysts had expected new home sales to rise to 425,000 units last month.

A day earlier, the National Association of Realtors reported that existing home sales increased 1.3% in April to an annual rate of 4.65 million units, and hopes that the U.S. housing sector is improving strengthened demand for the dollar on Friday.

Meanwhile, the euro came under pressure after the Ifo Institute for Economic Research reported earlier that its German business climate index ticked down to a five-month low of 110.4 in May, from a reading of 111.2 the previous month. Analysts had expected the index to fall to 110.9.

The report came a day after data showed that manufacturing activity in the euro zone expanded at its slowest rate in six months in May, although the region's service sector expanded at the fastest rate in almost three years.

Also in Europe, Germany's first-quarter gross domestic product grew 0.8% from the previous quarter and 2.5% on year, the first figure in line with expectations though the on-year figure beat market calls for a 2.3% growth rate.

The dollar was up against the yen, with USD/JPY up 0.25% at 101.98 and up against the Swiss franc, with USD/CHF up 0.15% at 0.8954.

The greenback was up against the pound, with GBP/USD down 0.23% at 1.6831.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.21% at 1.0872, AUD/USD up 0.10% at 0.9236 and NZD/USD down 0.28% at 0.8542.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.17% at 80.42.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

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