Dollar appreciates as GDP growth, home sales exceed forecasts

The dollar gained against the majority of its most-traded peers as the economy expanded more than previously estimated in the second quarter and as pending home sales in July exceeded forecasts.

The greenback appreciated against the euro and yen as investors speculated that Federal Reserve Chairman Ben S. Bernanke won’t hint at further monetary stimulus during his speech at a Aug. 31 conference. Europe’s shared currency pared a decline after German Chancellor Angela Merkel said Italy’s “reforms” will help reduce the nation’s interest rates. Sweden’s krona slumped to a four-week low against the euro after a research group predicted the central bank would need to lower interest rates.

“The slightly better U.S. housing number provided a push,” Mike Moran, a senior currency strategist at Standard Chartered in New York, said in a telephone interview. “It solidified the stronger dollar.”

The dollar gained 0.2 percent to $1.2538 per euro at 12:01 p.m. New York time. The greenback strengthened 0.3 percent to 78.73 yen. Europe’s shared currency rose 0.1 percent to 98.71 yen.

The euro has appreciated 0.6 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies, amid speculation policy makers will succeed in stemming market turmoil. The dollar has declined 1.3 percent and the yen has fallen 1.7 percent.

Swedish Krona

Sweden’s krona fell against all of its most-traded peers after the National Institute of Economic Research said Sweden’s central bank will cut its main lending rate to 1 percent from 1.5 percent this year to support expansion.

The currency fell 0.5 percent to 8.3495 per euro after dropping to 8.3715, the weakest level since Aug. 1. The krona slid 0.7 percent to 6.6588 per dollar, after tumbling by as much as 1 percent, the biggest intraday decline since July 6.

The Mexican peso decreased against most of its major peers as a shutdown of refineries caused by Hurricane Isaac curbed crude-oil demand. Mexican oil exports accounted for $27.1 billion in revenue in first six months of year, according to preliminary data from a national statistics agency.

The peso fell 0.7 percent to 13.2828 per dollar after declining as much as 0.9 percent to 13.3032, its lowest point since Aug. 3.

Canada’s dollar traded close to a four-month high versus its U.S. peer as investors tempered expectations of further monetary easing from Bernanke. The currency, nicknamed the loonie for the image of the waterfowl on the C$1 coin, gained 0.1 percent to 98.73 cents per U.S. dollar.

Page 1 of 2 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome