Dollar firms slightly on jump in US home sales

Arnd Wiegmann | Reuters

The dollar edged upward on Wednesday after a 6.1 percent jump in U.S. home sales data lifted expectations Federal Reserve policymakers may soon hike interest rates.

The increase in March of existing home sales to an annual rate of 5.19 million units reported by the National Association of Realtors was the highest level since September 2013. The percentage increase was the largest since December 2010.

Economists polled by Reuters had forecast home resales rising to only a 5.03-million-unit pace last month.

The euro, which earlier traded at $1.08 against the dollar, was last up 0.05 percent at $1.0741. The greenback was up 0.13 percent against the yen at 119.85 yen, while the dollar index was down 0.1 percent at 97.92.

Is king dollar crushing profits?
Is king dollar crushing profits?

In a subdued session for most major currencies, sterling topped $1.50 after Bank of England minutes emphasized hopes for a further improvement in the UK economy over the next year. It was last trading up 0.80 percent at $1.5041 after earlier touching a five-week high of $1.5079.

The Swiss franc fell more than 1 percent against the dollar and the euro after the Swiss National Bank said it was slashing the number of institutions exempt from negative rates on cash deposits held at the central bank.

The move increased the chances that the SNB could take interest rates deeper into negative territory, especially if financial flows into the safe-haven Swiss franc increase due to Greece's debt problems in the euro zone, according to analysts.

The dollar was last up 1.52 percent against the Swiss franc at 0.9699 .

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Many analysts and investors say Greece's exit from the euro prompted by Athens running out of funds in May or June could knock the euro swiftly below parity with the dollar. But for the moment, the market still believes in the ability of European policymakers to avert that scenario.

Many currency traders were on hold, awaiting more data on the U.S. economy and next week's meeting of the policymaking Federal Reserve Open Market Committee, according to Vassili Serebriakov, currency strategist at BNP Paribas.

"The Fed is in the blackout period before the meeting. Markets have not been reacting that much to the Greek headlines. There are just not a lot of drivers," he said.