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Dollar loses ground vs. rivals as U.S. data weighs

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Investing.com -

Investing.com - The dollar moved lower against the other major currencies on Monday, as far worse than expected U.S. housing sector data dampened demand for the greenback.

The dollar pushed lower against the yen, with USD/JPY sliding 0.43% to 120.95, after rising to two-month highs of 121.47 late Friday.

Data on Monday showed that U.S. new home sales dropped 11.5% last month to 468.000 units from a revised total of 529.000 units in August. Analysts had expected new home sales to slip 0.4% to 550.000 in September.

The dollar rallied late last week after European Central Bank President Mario Draghi signaled that further monetary easing is likely later this year.

The comments underlined the diverging monetary policy stance between the Federal Reserve and other central banks. The Fed is currently expected to start hiking interest rates sometime in early 2016.

On Friday, the People's Bank of China unexpectedly cut interest rates in an effort to shore up slowing growth in the world's second largest economy.

It was the sixth rate cut since last November, reinforcing the divergence in monetary policy between the U.S. and central banks in the rest of the world.

Investors were looking ahead to Wednesday's monetary policy announcement by the Fed for fresh indications on the timing of an initial rate hike.

EUR/USD rose 0.25% to trade at 1.1047, off Friday's lows of 1.0995, the weakest since August 11.

Earlier Monday, data showed that the IFO's business climate index for Germany fell to 108.2 from 108.5 in September, but was better than expectations for a reading of 107.8.

The current conditions index fell to 112.6, from 114 a month ago, but the expectations index rose to 103.8, from 103.3.

Elsewhere, the dollar extended losses against the pound, with GBP/USD up 0.31% at 1.5356 but remained higher against the Swiss franc, with USD/CHF gaining 0.30% to 0.9812.

The Australian and New Zealand dollars remained stronger, with AUD/USD advancing 0.44% to 0.7258 and with NZD/USD climbing 0.53% to 0.6787.

Meanwhile, USD/CAD fell 0.21% to trade at 1.3140.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.28% at 96.92, pulling away from Friday's two-month highs of 97.30.

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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 Nasdaq, Inc.


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

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