More Disappointing U.S. Data pushes Greenback Nearer 2-Month Low against Euro

By: Barbara Zigah

With currency investors trimming their long term holdings in the U.S. Dollar, the greenback slipped in Asian trading, closing in on the 2-month trough struck last week against the common currency Euro. As reported at 2:43 p.m. (JST) in Asia, the Euro traded at $1.2963, an increase of .15% and approaching the 2-month peak of $1.3008 struck last Friday. Disappointing economic data from the United States is triggering the exodus from the greenback which did manage to gain slightly versus the safe-haven Japanese Yen, but it nonetheless remains close to multi-month lows. The U.S. Dollar rose nearly .4% against the Japanese Yen, trading at 87.01 Yen, holding close to the 7-month low hit on the EBS trading platform last week when it struck 86.27 Yen. Some market players are keen to see what, if any, currency intervention the Japanese government may take should the Yen continue to climb.

Yesterday, housing data from the United States showed that new home sales lowered this month to a level not seen since April 2009; analysts attribute the expiration of the new home buyers’ tax credit for the reduction. This weak data has put on hold speculation that the Federal Reserve might consider a hike in interest rates sometime in the near future, and analysts suggest that Ben Bernanke’s testimony to the U.S. Congress tomorrow might put additional pressure on the U.S. unit.