US session – Dollar surges against yen after US homes sales rise
June 25, 2013 8:08 pm
Currency markets made a complete U-turn in the US session, as the dollar changed direction and rebounded following a series of strong economic data which gave investors optimism that the economic recovery in the US is gaining momentum.
This raises expectations that the Federal Reserve will taper stimulus later this year and cut back on its bond buying program. This sent US bond yields higher and lifted the dollar.
Early in the session, durable goods data as well as consumer confidence numbers topped expectations and helped lift market sentiment. US consumer confidence data surprised analyst expectations and rose to the highest level since January 2008. In May sales for newly constructed homes rose by 476, 000, topping estimates for 460,000, and more than the prior 454,000.
The euro fell against a broadly stronger dollar, with EURUSD dipping down to lows of $1.3064 where it found support, down 80 pips form the pre-US data high of $1.3142.
Sterling also weakened against the dollar, with GBPUSD down to lows $1.5396 before steadying at $1.5430.
The dollar outperformed versus the Japanese yen, with USDJPY surging to a high of 98.01 yen, gaining 1 percent from the earlier intra-day low of 96.95.
Currency markets made a complete U-turn in the US session, as the dollar changed direction and rebounded following a series of strong economic data which gave investors optimism that the economic recovery in the US is gaining momentum.
This raises expectations that the Federal Reserve will taper stimulus later this year and cut back on its bond buying program. This sent US bond yields higher and lifted the dollar.
Early in the session, durable goods data as well as consumer confidence numbers topped expectations and helped lift market sentiment. US consumer confidence data surprised analyst expectations and rose to the highest level since January 2008. In May sales for newly constructed homes rose by 476, 000, topping estimates for 460,000, and more than the prior 454,000.
The euro fell against a broadly stronger dollar, with EURUSD dipping down to lows of $1.3064 where it found support, down 80 pips form the pre-US data high of $1.3142.
Sterling also weakened against the dollar, with GBPUSD down to lows $1.5396 before steadying at $1.5430.
The dollar outperformed versus the Japanese yen, with USDJPY surging to a high of 98.01 yen, gaining 1 percent from the earlier intra-day low of 96.95.
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