Saturday July 26, 2008 - 02:22:12 GMT
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Reuters - www.reuters.com
FOREX NEWS-US dollar gains vs yen on US housing, sentiment data
* U.S. consumer sentiment rebounds from 28-year low
* Durable goods, housing top consensus
* Oil prices, equities remain in focus
(Recasts; updates prices, changes byline)
By Vivianne Rodrigues
NEW YORK, July 25 (Reuters) - The U.S. dollar rose against
the Japanese yen on Friday, after a trio of
better-than-expected data injected a dose of optimism aboutthe
The upbeat readings on U.S. durable goods orders, new-home
sales, and a rebound in consumer sentiment from a 28-year low
allayed some of the recent gloom over the economy and financial
markets, sending stocks higher and giving a boost to the
beleaguered U.S. currency.
"This is perhaps the best we could have ever hoped for amid
the current economic conditions," said Michael Woolfolk, senior
currency strategist at The Bank of New York Mellon in New
"It flies in the face of the pessimists out there calling
for a recession. It's just simply not reflected in the
numbers," he added. "The dollar rally gets a strong green light
to continue buying."
In late trading in New York, the dollar rose 0.5 percent to
107.87 yen <JPY=>, after climbing as high as 107.94 yen,
slightly below a one-month high of 107.98 yen set on Thursday,
according to Reuters data.
The euro traded 0.1 percent higher at $1.5693 <EUR=>,
roughly 3.0 cents below a record high set in mid-July.
Against the yen, the euro jumped 0.6 percent to 169.34 yen
But on the New York Board of Trade's U.S. dollar index
.DXY of major currencies the U.S. dollar remains trapped in
its range of the past four months, after seeing a big slide
U.S. durable goods orders were up 0.8 percent in June,
after a revised 0.1 percent gain in May, the Commerce
Department said Friday. For details, see [ID:nN24332112]
Separate data showed sales of new homes in the United
States fell to a 530,000 annual pace last month, against market
expectations for a drop to a 500,000 rate, while consumer
sentiment recovered unexpectedly in July after falling in June
to the lowest level since the early 1980s. [ID:nN25494864]
OIL, EQUITIES IN FOCUS
Gains in U.S. equities and a continued drop in oil prices
to a seven-week low on Friday further lifted sentiment toward
the dollar. U.S. crude futures last traded down 1.7 percent, at
$123.37 a barrel.
"We are really seeing a couple of different factors shape
up: oil dropping, equities rally and clearly the good data,
which should support at least a minimum dollar rally to
yesterday's lows (on euro/dollar)," said Greg Salvaggio, vice
president of trading at Tempus Consulting.
More good news on the mortgage sector added to dollar
strength. The U.S. Senate voted on Friday to limit debate on a
bill aimed at shoring up both the housing market and mortgage
finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz),
paving the way for a final vote that is expected on Saturday.
But some analysts cautioned that the impact on the dollar
from Friday's positive data may be limited.
"The follow-through will be distinctly limited," said Alan
Ruskin, chief international strategist at RBS Global Banking
and Markets, in a research note.
"The next real lead on the economy comes from the ISM
numbers, and by far the most important data -- nonfarm payrolls
-- in a week," he said.
The euro hit a two-week low versus the dollar on Thursday
after data showed German business sentiment suffered its
biggest drop since September 2001, while euro zone PMIs pointed
to contraction in both the services and manufacturing sectors.
(Additional reporting by Wanfeng Zhou and Lucia Mutikani in
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