US dollar drops on weak home sales, Pakistan unrest

US dollar drops on weak home sales, Pakistan unrest

Story link: US dollar drops on weak home sales, Pakistan unrest

TAGS:

The US dollar was weaker in relation to the euro for the sixth session in a row on Friday as unrest continued in Pakistan and as a Commerce Department report showed that new home sales were down again in November.

The report said that new home sales were down by 9 percent last month, falling even though a report earlier this week also showed that prices are also falling.

The dollar was also hurt by increasing sentiment that the Federal Reserve will cut interest rates again when it meets at the end of January, with interest-rate futures being traded on the Chicago Board of Trade putting the chances of a rate cut on January 30 at 90 percent.

The greenback was trading at €1.4710 to the dollar just past noon in New York, and was down against 12 of 16 major currencies on the day.

The dollar’s biggest losses came against the Swiss franc, which was trading at SFr1.1274 to the dollar, and the South African rand, at R6.8185 to the dollar.

The pound was also lower against the euro on the session, trading at 73.86p to the euro in New York as a report of dropping house prices have increased the chance that the Bank of England will cut interest rates again soon.

The Swiss franc gained against all 16 major currencies as investors continued to flee from risk in the wake of yesterday’s assassination of Benazir Bhutto in Pakistan, with the Swiss currency trading at SFr1.6585 to the euro and at SFr2.2454 to the pound.

In addition, the yen was up in relation to the US dollar and the pound, again on risk aversion.

The yen traded at ¥112.9500 to the dollar and at ¥224.9453 to the pound.