Forex – Dollar Rides New Home Sales Surge Higher; Euro, Sterling Slips

© Reuters. – The dollar rose against a basket of major currencies Tuesday as new home sales surged to a 17-month high, suggesting resilience in the U.S. housing market after disappointing existing home sales numbers.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.38% to 97.33.

The Commerce Department said new home sales to a seasonally adjusted annual rate of , the highest level since November 2017. That was well above economists’ forecasts for a decline to 647,000 units.

The uptick in the new home sales comes as amid outperformance in the South and Midwest in the U.S. as the “watering down of the (state and local tax) deduction and mortgage interest deduction has likely accelerated the population migration from high-cost, high-tax states,” Amherst Pierpoint said.

The dollar’s surge higher was also helped by weakness in both the euro and sterling.

fell 0.32% to $1.2940 as Brexit-related angst continued with little sign of a breakthrough in talks between British Prime Minister Theresa May and opposition leader Jeremy Corbyn.

fell 0.39% to $1.1211.

fell 0.11% to Y111.81, but downside was limited as risk-on sentiment limited demand for the safe-haven yen.

rose 0.71% to C$1.3434 a day ahead of the Bank of Canada monetary policy decision. The central bank is expected to leave rates unchanged at 1.75%, but leave the door open to possible tightening, according to Manulife Asset Management.

“Full capitulation like we’ve seen from the Federal Reserve or the European Central Bank in my view is unlikely,” said Frances Donald, head of macroeconomic strategy at Manulife.

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