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US Dollar Subdued by Weak Home Sales

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US Dollar Subdued by Weak Home Sales

The US dollar had its gains capped Friday, as weaker than forecast home sales data weighed on the forex markets.

The sale of previously-owned US homes declined 5.1 percent to 4.62 million in January, the National Association of Realtors reported today. The decline, which was the biggest in 18 months, follows a gain of 0.8 percent in December.

“Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception,” said NAR chief economist Lawrence Yun. “Some housing activity will be delayed until spring. At the same time, we can’t ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates.”

As of 18:30 GMT, the US dollar index was consolidating at 80.27, relatively unchanged from its previous close. The dollar was weaker against the euro and Swiss franc. The EURUSD pair strengthened to 1.3758 in the early North American session, before consolidating at 1.3743. This represents a gain of 25 pips. The US dollar declined a quarter of a percent against the franc, sending the USDCHF pair to 0.8874.

The greenback enjoyed steady gains against the Canadian dollar, falling just short of 1.12 in Europe. As of 18:30 GMT, the USDCAD pair was trading at 1.118, a gain of 18 pips.

The USDJPY rose nearly 0.3 percent after the minutes of the latest Bank of Japan meetings revealed that record stimulus could continue longer than initially estimated. As of 18:30 GMT, the pair was trading at 102.62.

The British pound was weaker versus the dollar, after UK retail sales fell at the steepest rate in nearly two years. The GBPUSD experienced volatile fluctuations before hitting 1.6642 in North America’s afternoon session.

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