U.S. Dollar Surges on Positive Consumer Sentiment and Housing Market Data

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U.S. Dollar Surges on Positive Consumer Sentiment and Housing Market DataThe U.S. dollar advanced today after data showed that U.S. consumer confidence and housing posted strong growth, boosting prospects that the Federal Reserve may tighten monetary policy soon.

Sales of new single-family houses advanced 18.6 percent to 504,000 units last month, the most since May 2008 and the strongest advance since January 1992.

Industry group The Conference Board announced that its gauge of consumer confidence surged to 85.2 in June, up from 82.2 in May. A Reuters survey of economists had estimated the average reading to hover around 83.5.

“FOMC officials have certainly become concerned about stagnation in the housing market, and the data today might alleviate that concern,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at the Royal Bank of Scotland told Reuters. FOMC stands for the Federal Open Market Committee.

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The dollar had earlier plunged after data showed that prices of single-family homes grew slower than forecasted in April. The S&P/Case-Shiller combined gauge of 20 metropolitan zones surged 0.2 percent in April on an annual basis, much less than economists had expected.

The U.S. dollar index, which tracks the dollar against a pool of six counterparts, edged up 0.09 percent to 90.343. The euro fell 0.01 percent to $1.3600, while the dollar traded 0.17 percent higher versus the yen at 102.10 yen. The U.S. currency also traded 0.08 percent higher versus the Swiss franc at 0.8950 franc, while the pound declined 0.3 percent against the greenback to $1.6975 after the Bank of England Governor Mark Carney dampened expectations of interest rate increase.

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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com