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US Dollar Rallies Briefly After Release of Home Sales Data, Later Retraces Gains

February 24, 2017 at 18:25 by Simon Mugo

Great Seal of the United States on one-dollar billThe US dollar rallied briefly against its main competitors after the release of new homes sales data for the month of January as reported by the Census Bureau. The greenback’s brief rally was also supported by the release of a positive consumer confidence index report for February as tracked by the University of Michigan.

The US Dollar Index, which tracks the greenback’s performance, hit a daily high of 101.09 after the two announcements. However, the index retraced most of its daily gains to trade at 100.99 as at the time of writing.

The US dollar started the day’s session on a losing streak against its main peers such as the euro and the Japanese yen. The currency rallied briefly after the Census Bureau reported that new homes sales for January had risen by 3.7% to hit 555,000 units, but did not meet the forecasted target of 570,000 units.

The greenback’s rally can also be attributed to the University of Michigan consumer sentiment index report, which indicated that consumer confidence in February had dropped to 96.3 as compared to January’s 98.5.

The US durable goods order report scheduled for release on Monday is likely to influence the greeback’s performance. The currency remains susceptible to Donald Trump‘s comments, which have affected the currency’s performance since he was elected president in November last year. 

The USD/JPY currency pair was trading at 112.19 as at 18:00 GMT having opened the day’s session trading at 112.83. The EUR/USD was trading at 1.0568 having dropped from a daily high of 1.0615 prior to the two announcements.

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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