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Dollar Trickles Lower Ahead of US-EU Meeting

7/26/2018, 10:01:27 AMBasics of Trading
Dollar Trickles Lower Ahead of US-EU Meeting

The dollar trickled lower against rivals Wednesday as data showed continued weakness in the U.S. housing market ahead of a meeting between the United States and European Union this afternoon.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.07% to 94.32.

Sales of new U.S. single-family homes fell to an eight-month low in June, raising concerns that the housing market recovery was beginning to wane.

The Commerce Department said Wednesday new home sales fell 5.3% to a seasonally adjusted annual rate of 631,000 units last month.

That was a faster pace of decline than economists had anticipated, but analysts downplayed the weak data, citing the longer-term trend of new home sales remained solid, supported by job growth and easing credit conditions.

"We continue to believe the housing market recovery will continue to unfold over the next 12-18 months at a moderate pace, as we expect demand to improve, driven by job growth and modestly easing credit conditions," JPMorgan said Tuesday.

Elsewhere, EUR/USD fell 0.07% to $1.1680 despite bullish German business survey data as focus shifted to President Trump's meeting with European Commission President Jean-Claude Juncker this afternoon to discuss trade.

Heading into the discussions, both sides have made threats and demands. The U.S. has threatened to increase its 2.5% levy on imported cars to 25%, while the EU has threatened to introduce tariffs on $20 billion worth of US goods if the United States follows through with additional tariffs on imported cars.

GBP/USD rose 0.05% to $1.3150 as data showing mortgage approvals hit a nine-month high was offset somewhat by continued Brexit-related angst.

USD/CAD fell 0.40% to C$1.3102 as pair came under pressure as rising oil prices supported the loonie.

USD/JPY fell 0.19% to Y110.98.