The dollar extended its loss against the euro and sterling after lower-than-expected US new home sales reinforced expectations for a Fed rate cut as early as October. The euro rose to 1.3665, close to the record peak at 1.3670. The sterling climbed back to above the 2 handle versus the dollar.
US new home sales rose 2.6% to an annual rate of 858k units in March, but below the consensus of 888k. Recall that the sharp decline in March existing home sales induced a dollar sell-off yesterday. The lackluster data today put the slowing housing sector in the spot light again.
Earlier, the dollar edged up slightly after durable goods orders rose 3.4% in March, beating the estimate of 2.5%. However, a single upside surprise in such a volatile indicator is not sufficient to challenge the expectations of the economy and the Fed rate outlook.
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