Yen Advances against the Dollar as New U.S. Home Sales Lag Forecasts

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Yen Advances against the Dollar as New U.S. Home Sales Lag ForecastsThe yen advanced to a two-week high against the U.S. dollar after U.S. and China released weak economic data on Wednesday as the Ukraine tensions bit hard.

The yen was 0.3 percent up at 102.31 a dollar as of 2:15 p.m. in New York. The euro surged 0.1 percent to $1.3815 after earlier edging 0.4 percent higher to $1.3855. The 18-nation currency ended a six-day advanced against the Japanese currency when it plunged 0.2 percent to 141.34 yen.

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“The big trigger was the news this morning about escalating tensions in the Ukraine, increasing demand for safe havens,” Mark McCormick, a New York-based macro strategist at Credit Agricole SA, told Bloomberg. “Macro-wise, the softer data reports in China and U.S. did not help.”

The Bloomberg Dollar Spot Index, which monitors the dollar against 10 peers, remained slightly unchanged at 1,011.35 after earlier touching 1,012.09, its strongest level since April 8.

U.S. new home sales fell 14.5 percent to 384,000, their lowest in eight months, according to data released by the Commerce Department on Wednesday. Economists had expected sales of new homes to average 450,000.

The Japanese yen also advanced after a report released today by Markit Economics and HSBC Holdings showed that Chinese manufacturing index stood at 48.3 this month, compared to 48 in March. A reading below 50 indicates contraction, a figure that has persisted for four straight months now.

The euro also advanced against the dollar after a report showed that services and manufacturing sector in the euro zone rose faster than market had expected. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com