GO
Loading...

Dollar Down but Pares Losses

The dollar was largely down against other major currencies, although a surprisingly strong rise in new home sales helped the dollar reverse some of its losses.

The government reported that new home sales beat expectations and rose 3.4 percent in November to an annual pace of 1.047 million units, which eased concerns about the extent of the housing market's slowdown and tempered expectations that the Federal Reserve could cut interest rates early next year to stimulate growth.

"The new home sales report did beat the consensus forecast, and that, I think, provides further evidence to support the view that the worst of the housing downturn may have passed," said Alex Beuzelin, senior market analyst for Ruesch International in Washington, D.C.

With the European Central Bank widely expected to keep raising rates and the Bank of Japan possibly discussing tighter monetary policy at its meeting in January, the dollar slipped as investors returned from the Christmas holiday with more conviction that the U.S. currency's yield advantage will fade next year.

Data showing weaker-than-expected Japan retail sales was overshadowed by a media report that the Bank of Japan will probably discuss raising interest rates at next month's policy meeting.

Currency trading in Asia was disrupted after strong earthquakes near Taiwan damaged undersea telecommunications cables, restricting international telephone traffic and Internet speeds, but trade in the North American markets was not affected.

U.S. benchmark Treasury note prices, meanwhile, were off almost a full point on the day at 99 27/32, bringing yields up to 4.64%, taking their lead from a fall in European government bond prices and the stronger housing data.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*

Don't Miss

U.S. Video

  • CNBC's Tyler Mathisen looks back at the week's top business and financial stories. The markets were closed for Thanksgiving, but did manage to hit new highs. Low oil prices gave consumers more money to spend for Black Friday.

  • Cyber Monday deals on Walmart's website on Dec. 2, 2013.

    CNBC's Tyler Mathisen looks ahead to what are likely to be next week's top stories. The jobs report comes out this week, as do auto sales. And the Rockefeller Center Christmas tree is lit.

  • Following last week's wild energy ride, analysts expect oil prices to continue to drop during the holiday season. CNBC's Patti Domm reports.