USD/JPY lifted by US home sales, kiwi rises after RBNZ

USD/JPY was off one-week lows against the yen after rising on Thursday and held above a one-week low of 123.57 yen touched in the previous session. It was flat on the day at 123.98. U.S. data on Wednesday showed existing home sales rose to a 8-1/2 year high, firming expectations that the Federal Reserve is on track to hike interest rates later this year. The prospect of higher rates enhanced the dollar’s appeal, and propelled it to session highs.

NZD/USD climbed more than half a U.S. cent to a peak of 0.6654 from 0.6570, moving away from a six-year low of 0.6498 plumbed on July 14 after the Reserve Bank of New Zealand rate policy decision. The central bank cut its cash rate by 25 basis points to 3.0 percent in response to a dimmer economic outlook and lower inflation. The kiwi was last up 0.8 percent on the day at 0.6628. Investors bought back the NZD possibly due to overstretched short positioning.

EUR/USD inched up about 0.1 percent to 1.0943, moving back toward a three-month low of 1.0808 set on Monday, as Greece moved closer to resolving the debt crisis that had threatened to pave the way for its exit from the Eurozone. Greek Prime Minister Alexis Tsipras faced down a revolt by rebels in his leftists Syriza party to win parliament’s backing for a second package of reforms required to start talks on a financial rescue deal.

GBP/USD got a lift from the prospect of higher interest rates by the Bank of England, and was up slightly on the day at 1.5616. Minutes from the Bank of England’s July 8 meeting revealed on Wednesday that several policymakers are moving towards voting for the first rate increase following BOE Governor Mark Carney’s recent comments that a hike might happen around the end of year. Economists predicted that three of nine members of the BoE’s Monetary Policy Committee might vote for a rate hike in August, which could put the central on track for a majority to back an increase later this year or in early 2016.

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