US Dollar Gains Despite Soft New Homes Sales Data

The US Dollar made gains in overnight trading, despite the release of the weak new homes sales data which showed that home prices in the US are increasing at a faster rate than wages, making home ownership more and more difficult for the average American.

The rise in the greenback came after hawkish comments made by several Federal Reserve members provided support for the US Dollar. With market sentiment remaining under pressure in the wake of the Brussels terror attacks, it was a series of hawkish statements from key Federal Reserve members that saw the US Dollar hit a 5-month high against the Euro.

New Homes Sales Data

In a report issued by the U.S. Commerce Department, official data showed on Wednesday that new home sales increased by 2.0% to a seasonally adjusted figure of 512,000 units for last last month. New home sales in January were revised to show a 7.0% decline, down to 502,000 units from the previous 9.2% decline reading. February’s figure came after analysts had been expecting a 3.2% increase from January’s official number to reach a total of 510,000 units.

 

Fed Members

Late on Tuesday before the release of the disappointing home sales data, Philadelphia Fed President Patrick Harker said that the Federal Reserve should increase interest rates as early as next month should the U.S. economy continue to show signs of improvement. On the same day, Atlanta Federal Reserve President Dennis Lockhart indicated that the US Central Bank could raise interest rates in April. Following this came Chicago Fed President Charles Evans saying he expects another two more interest rate rises before the end of the year, should the US economy remain on track.

Dollar Gains

Overnight in the Asian trading session, the US Dollar rose 0.09% against the Euro, 0.17% against the British Pound and was up 0.36% against the Japanese Yen, whilst gaining 0.50% against the Australian Dollar.

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Daniel Simmons