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Forex - Dollar edges higher in early Asian trade

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Forexpros - The U.S. dollar gained ground on its major counterparts in Asian trade Wednesday, as weaker than expected economic data fueled hopes that the U.S. Federal Reserve Bank would take steps to stimulate the faltering economy.

In early Asian trade, the greenback was higher against the euro, with EUR/USD falling 0.07% to hit 1.4231.

Early in Tuesday trade, the U.S. Census Bureau reported that new home sales dropped more than expected in July, falling 0.7% to a seasonally adjusted annual rate of 298,000. Economist's forecasts were for a 1% gain in July to 310,000.

It was the third straight month the figure declined and slowest growth rate since February.

In a separate report, the Richmond Federal Reserve Bank said its manufacturing index slumped to minus 10 in August from minus 1 in July, the lowest monthly rating since June of 2009. Forecasts were for the figure to fall to minus 7 for the month.

The numbers, while worse than expected, served to heighten expectations for the Federal Reserve's meeting in Jackson Hole, Wyoming this week, where investors are pinning hopes on a new round of quantitative easing from the U.S. central bank.

For the second day, Wall Street shares rallied, with the Dow Jones Industrial Average closing up 3%, to 11,176.76. The Nasdaq Composite Index rose 4.3% to 2,446.06, and the S&P 500 gained 3.4% to 1,162.35.

Meanwhile, the greenback was up against the British pound, with GBP/USD slipping 0.02% to 1.6491.

The dollar gained ground against the yen but fell against the Swiss franc with USD/JPY adding 0.04% to hit 76.68, and USD/CHF lower by 0.06% to hit 0.7922.

The greenback was higher against its Canadian, Australian and New Zealand counterparts with USD/CAD up 0.11% to hit 0.9883, AUD/USD lower by 0.08% to hit 1.0518, and NZD/USD falling 0.23% to hit 0.8340.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.03% at 73.89.

Monthly core durable goods orders figures from the U.S. Census Bureau were scheduled for release before the start of trading Wednesday.

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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.

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