Dollar gains after strong US home sales, kiwi up on trade data

The dollar was given a lift after some very strong US housing data which indicated the economic recovery was on track and this supported the case for the Federal Reserve to raise interest rates in the near term.

The report showed new US single-family home sales surged to a more than eight-year peak in April and prices hit a record high.

The US dollar index was near a two-month high of 95.60 at 95.61. in reaction to the data.

The upbeat housing numbers backed the Fed’s April policy meeting minutes, released last week, which hinted that the central bank may raise rates soon if the economy appeared strong enough.

EURUSD was steady at $1.1139, within reach of $1.1133, its lowest level since March 18 touched on Tuesday when it dropped 0.7 percent.

USDJPY was up 0.1 percent at 110.090 yen, moving off Tuesday’s low of 109.170.

NZDUSD rose 0.4 per cent following the release of better-than-expected New Zealand trade data, showing a rise in the surplus to NZ$292m in April.

AUDUSD gained one-third of a percentage point, rising after data showed the value of construction work done, a key input for GDP data, fell 2.6 per cent year-on-year in the first three months of this year, from a revised 2.9 per cent fall in the December quarter. This was below the 1.5 per cent drop forecast on average, but economists were encouraged that residential construction, particularly that of units, remained firm.

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