Forex - Dollar dips as stocks move higher, BoJ move disappoints

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Investing.com - The dollar traded largely lower against most major currencies on Tuesday as market participants left the safety of the greenback and went long on stocks, which rose on renewed optimism that U.S. quarterly earnings may surprise on the upside.

A Bank of Japan decision to delay rolling out stimulus measures sent the yen gaining, which dulled the greenback's luster as did solid European sentiment data.

In U.S. trading on Tuesday, EUR/USD was down 0.01% at 1.3313.

Stock prices rose on Tuesday as investors began to cast aside fears that fourth-quarter earnings will seriously disappoint and moved toward risk-on equities and away from the dollar.

Meanwhile the yen saw solid demand after the Bank of Japan announced plans to conduct open-ended asset purchases to stimulate the economy but not until 2014, which caught many investors expecting more immediate action off guard.

The yen surged on the news, which came at the dollar's expense as did strong economic sentiment data out of Europe.

Earlier Tuesday, the ZEW Centre for Economic Research reported that its index of German economic sentiment improved to 31.5 in January from 6.9 the previous month, far surpassing expectations for a rise to 12.0.

A separate report showed that the ZEW index of eurozone economic sentiment jumped to 31.2 this month from 7.6 in December, compared with expectations for a reading of 14.0.

The dollar did see support, however, on weaker-than-expected housing data out of the U.S.

In a report, the National Association of Realtors said that home sales fell to 4.94 million units from 4.99 million in November, whose figure was revised down from 5.04 million.

Analysts had expected existing home sales to rise to 5.10 million last month.

The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.03% at 1.5826.

The dollar plunged against the yen, with USD/JPY trading down 1.01% at 88.70 and fell against the Swiss franc, with USD/CHF trading down 0.35% at 0.9293.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.04% at 0.9926, AUD/USD up 0.45% at 1.0563 and NZD/USD trading up 0.57% at 0.8408.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.17% at 79.99.

On Wednesday, the U.S. is to release government data on crude oil stockpiles.








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This article appears in: Investing , Forex and Currencies

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