U.S. Dollar Down Before Home Sales Report

  July 27th, 2009 at 12:57, Jan Baros

US DollarThe U.S. dollar started another week losing against currencies like the euro, as a report today is expected to show that home sales in the United States rose significantly, suggesting that the global slump is facing its final days, consequently attracting investors to riskier assets in stocks.

The dollar is entering the third week of losses today as multiple factors are pushing the currency down, from optimism in Asian stock markets, to concerns regarding the U.S. dollar as the main world reserve currency. A report to be released today in the United States is likely to indicated a sharp rise in the nation’s monthly home sales, which would prompt investors further to high-yield, since an improved scenario in the real estate market is a solid signal that the recession in ending in America and consequently in a global dimension.

The optimism is high, the questioning regarding the U.S. dollar as the main reserve currency, and speculations that foreign-exchange volatility will fall weighed altogether to create a negative outlook for the greenback in the beginning of this week. According to specialists its hard to say if the dollar will decline versus the euro to last year’s levels, when it hit $1.60, but certainly, with the current scenario we will be likely to see the dollar going further down.

EUR/USD traded at 1.4285 as of 11:53 GMT from 1.4215 in the beginning of the session. USD/CHF declined to 1.0661 from 1.0725.

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