The dollar advanced after a report showed US new home sales growth rate in April reached the highest in 14 years, dampening the expectations that the Fed may need to cut interest rates this year.
US new home sales rose 16.2% in April to 981k, beating the estimate of 860k. The unexpectedly robust housing data added evidence that the spillover from housing sector to the whole economy is limited. The Fed is widely expected to hold interest rates unchanged in its June monetary policy meeting and is likely to make no move for the rest of the year. The greenback rallied following the housing report. The euro fell from 1.3450 to a day low at 1.3417 versus the dollar, and the sterling dipped around 50 pips against the dollar.
Earlier, the dollar was little changed after the release of two US second-tier data. The weekly jobless claims rose to 311k, compared to a forecast of 305k. The durable good orders rose 0.6% in April, below the expectation of 1.0%. Ex-transport index was up 1.5%, better than an expected 0.6% rise.
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