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News from USA Turns Positive, USD Rallies

February 27, 2014 at 2:52 by Vladimir Vyun

The all-seeing eye on top of pyramid on one-dollar billEconomic news from the United States turned positive, increasing the attractiveness of the US currency. The dollar rallied against the euro yesterday and retained its gains today. The rally versus the Great Britain pound and the Japanese yen was more limited.

The most important reason for optimism was the housing data. New home sales rose to the seasonally adjusted annual rate of 468,000 in January from 427,000 in December. Forecasters have predicted a drop to 406,000, but the pessimistic expectations proved to be wrong, and now economists look with on the US economy renewed optimism.

Federal Reserve Chairwomen Janet Yellen speaks today and traders hope that she will mention her plans for the future stimulus cuts. Earlier this month, Yellen said that economic growth looks resilient enough and the Fed corrects the pace of stimulus reduction only if economic conditions would change dramatically.

EUR/USD sank from 1.3743 to 1.3685 yesterday and traded at 1.3687 as of 2:49 GMT today. GBP/USD was down from 1.6679 to 1.6670 on the previous trading session, but reversed its movement and rose to 1.6676 on the current session. USD/JPY was up from 102.22 to 102.35 before trading at 102.38.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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