USD stronger on rate speculation, house prices

Story link: USD stronger on rate speculation, house prices

The US dollar strengthened versus the euro and the yen on Thursday on sentiment that the Federal Reserve will raise US interest rates before the end of the year after the minutes of the most recent meeting of the Fed, released yesterday, showed that the decision to cut rates at that meeting was a close thing.

Also helping the greenback was data in a report from the Office of Federal Housing Enterprise, which showed that US house prices fell 0.2 percent in the first quarter, less than had been expected.

At a few minutes before noon in New York, the dollar traded at $1.5713 to the euro while it took ¥103.9750 to buy a dollar.

The pound, meanwhile, strengthened in relation to the dollar, the euro, and all major currencies on a report showing that retail sales in the UK dropped 0.2 percent in April from March levels, less of a decline than was anticipated.

The report on sales lessened the possibility that the Bank of England will cut interest rates in June.

In late morning trade, a pound was worth $1.9801 while it traded at 79.36p to the euro.

The Australian dollar saw gains on the possibility of an interest rate hike from the Reserve Bank of Australia and on demand for higher yielding currencies, so that at just before noon in New York it took 95.60 cents US to buy an Australian dollar.

The New Zealand dollar was also stronger versus the dollar after the Finance Minister there cut taxes, making it less likely that the Reserve Bank of New Zealand will cut interest rates.

The kiwi was worth 78.52 cents US in late morning trade in New York.