The dollar may rise against the euro and pound for a second day as an unexpected reduction last month in U.S. sales of previously owned homes increased the haven appeal of the world’s reserve currency.
The yen slid yesterday to a three-month low against the dollar as Japan’s trade deficit widened last month, making the currency less attractive as a refuge from the financial crisis. The Polish zloty dropped against the euro after the central bank cut its main interest rate as the economy headed for its worst recession in almost a decade.
“The increase in risk aversion has sent the dollar higher,” said Omer Esiner, a senior analyst in Washington at Ruesch International Inc., a currency trading company. “The dollar’s downside is going to remain underpinned by mounting concerns about the global economic outlook and continued worries about the financial system in general.”
The dollar traded at $1.2729 per euro at 7:16 a.m. in Tokyo, after appreciating 1 percent yesterday. The U.S. currency was at $1.4219 against the pound following a 2 percent gain. The yen was at 97.44 per dollar after declining 0.8 percent and touching 97.78, the weakest since Nov. 17. The yen traded at 124.05 per euro after reaching 125.15, the weakest since Jan. 9.
The ICE’s Dollar Index, which tracks the U.S. currency versus the euro, yen, pound, Canadian dollar, krona and Swiss franc, increased 1.2 percent to 87.906 yesterday. It touched 88.254 on Feb. 18, the highest level since Nov. 21, when it reached a 2 1/2-year high.
U.S. Housing Drop
Purchases of existing homes in the U.S. fell 5.3 percent in January to an annual rate of 4.49 million, the lowest level since 1997, even as falling prices made them more affordable, the National Association of Realtors said yesterday. The median forecast of 70 economists surveyed by Bloomberg News was for a 1.1 percent increase.
The dollar also gained versus the euro and rose 1.2 percent to 8.9209 Swedish kronor yesterday after Ukraine’s credit rating was cut by two levels by Standard & Poor’s a day after Latvia’s debt was downgraded to junk. Banks from Austria, Italy, France, Belgium, Germany and Sweden account for 84 percent of bank loans in central and eastern Europe.
The yen slid yesterday to a three-month low against the dollar as Japan’s trade deficit widened last month, making the currency less attractive as a refuge from the financial crisis. The Polish zloty dropped against the euro after the central bank cut its main interest rate as the economy headed for its worst recession in almost a decade.
“The increase in risk aversion has sent the dollar higher,” said Omer Esiner, a senior analyst in Washington at Ruesch International Inc., a currency trading company. “The dollar’s downside is going to remain underpinned by mounting concerns about the global economic outlook and continued worries about the financial system in general.”
The dollar traded at $1.2729 per euro at 7:16 a.m. in Tokyo, after appreciating 1 percent yesterday. The U.S. currency was at $1.4219 against the pound following a 2 percent gain. The yen was at 97.44 per dollar after declining 0.8 percent and touching 97.78, the weakest since Nov. 17. The yen traded at 124.05 per euro after reaching 125.15, the weakest since Jan. 9.
The ICE’s Dollar Index, which tracks the U.S. currency versus the euro, yen, pound, Canadian dollar, krona and Swiss franc, increased 1.2 percent to 87.906 yesterday. It touched 88.254 on Feb. 18, the highest level since Nov. 21, when it reached a 2 1/2-year high.
U.S. Housing Drop
Purchases of existing homes in the U.S. fell 5.3 percent in January to an annual rate of 4.49 million, the lowest level since 1997, even as falling prices made them more affordable, the National Association of Realtors said yesterday. The median forecast of 70 economists surveyed by Bloomberg News was for a 1.1 percent increase.
The dollar also gained versus the euro and rose 1.2 percent to 8.9209 Swedish kronor yesterday after Ukraine’s credit rating was cut by two levels by Standard & Poor’s a day after Latvia’s debt was downgraded to junk. Banks from Austria, Italy, France, Belgium, Germany and Sweden account for 84 percent of bank loans in central and eastern Europe.
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