The U.S. dollar came off two-week lows and displayed some strength on Wednesday, as rising concerns about the economic impact of the dreaded coronavirus spread weighed on some major currencies.
Data showing a much bigger than expected increase in U.S. new home sales in the month of January supported dollar’s uptick.
According to the data released by the Commerce Department today, new home sales spiked by 7.9% to an annual rate of 764,000 in January after jumping by 2.3% to an upwardly revised rate of 708,000 in December.
Economists had expected new home sales to surge up by 2.3% to an annual rate of 710,000 from the 694,000 originally reported for the previous month.
With the much bigger than expected increase, new home sales reached their highest annual rate since hitting 778,000 in July of 2007.
The dollar index, which rose to 99.27 by mid-morning, gave up some gains subsequently, and was last seen at 99.12, up 0.16% from previous close.
Against the Euro, the dollar was flat at $1.0885 a little while ago, after having moved between $1.0855 and $1.0910 earlier in the session.
Germany’s economy is set to grow a modest 0.1% in the first quarter of 2020 as the industrial sector is set to remain sluggish and the spread of the coronavirus across the world dampen business sentiment, the DIW think tank said Wednesday.
The DIW economic barometer fell by four points to a level of 89 in February.
French consumer confidence remained unchanged in February, monthly survey results from the statistical office Insee showed on Wednesday.
The consumer sentiment index came in at 104, unchanged from January. The indicator has remained above its long-term average of 100 and economists’ forecast of 103.
Agaist Pound Sterling, the dollar was at $1.2907, well off yesterday’s close of $1.3003.
The Japanese Yen was down 0.2% against the dollar, with a unit of dollar fetching 110.43 yen, compared to 110.20 yen yesterday.
The Aussie was down more than 0.75% against the dollar, with the Aussie-Dollar pair quoting at 0.6553.
Against the Loonie, the dollar was up nearly 0.3% at 1.3316. The Swiss franc was roughly flat with the dollar at 0.9765.
The number of confirmed new coronavirus cases in South Korea topped 1,100 and outbreaks in Italy and Iran spread to more countries, raising concerns about the impact of the outbreak on global growth.
Mainland China had 406 new confirmed cases of coronavirus infections on Tuesday, the country’s National Health Commission said, down from 508 cases a day earlier.
The United States alerted Americans on Tuesday to begin preparing for the “inevitable” spread of the coronavirus disease that is sweeping the world.
There are 53 confirmed cases in the United States, and officials are calling on Congress to urgently pass billions of dollars to fund the response effort.
A World Health Organization expert has warned that countries outside China are “simply not ready” for a pandemic.
The material has been provided by InstaForex Company – www.instaforex.com