Dollar mixed on mixed economic data
NEW YORK (AP) — The dollar edged up against the euro and British pound but fell against the Japanese yen on Tuesday as a report on U.S. home sales suggested winter problems, while data on manufacturing showed gains.
The 16-nation euro slipped to $1.4406 in late morning trading in New York from $1.4412 late Monday afternoon, while the British pound fell to $1.6035 from $1.6094.
The dollar dropped to 91.52 Japanese yen from 92.60 yen.
On Tuesday, the National Association of Realtors said its seasonally adjusted index of pending home sales fell 16 percent to a level of 96 from October to November. It was the first decline after nine months of gains and signals sales will drop this winter.
Meanwhile, the government said factory orders rose 1.1 percent in November, more than twice what economists had expected, reflected continued expansion in manufacturing.
Win Thin, senior currency strategist at Brown Brothers Harriman in New York, said the dollar’s inverse relationship to stocks continued in the new year — but that was likely to change as 2010 progressed.
When confidence in the economy improves, the dollar typically suffers as investors place capital in riskier assets outside the U.S. or bet on equities.
On Tuesday, the dollar was down 0.1 percent against a basket of six currencies, while the Standard & Poor’s 500 index was up 0.1 percent.
Thin said that as investors increasingly expected the Fed to raise interest rates from their current rock-bottom range near zero in the first half of the year, the dollar would start climbing with stocks.
In other trading Tuesday, the dollar rose to 1.0318 Swiss francs from 1.0294 francs late Monday, but dropped to 1.0369 Canadian dollars from 1.0422.