Confidence reports lift USD over euro

Story link: Confidence reports lift USD over euro

The US dollar gained on the euro after German business confidence was down more than expected in August.

The Ifo Institute’s German business confidence index was at 94.8 in August, down from 97.5 in July.

The euro was also hurt by sentiment that the European Central Bank will cut interest rates next year and by gains in oil prices, while the greenback was helped by a gain in consumer confidence in August.

The Conference Board reported its confidence index was at 56.9 in August, up from 51.9 in July.

At the same time, the Commerce Department said that new home sales were lower than expected July but still up from June sales, which had been revised downward from earlier reports.

In late morning trade in New York, the dollar traded at $1.4676 to the euro, while the greenback was also up versus the yen to trade at ¥109.7350 and the euro declined versus the Japanese currency, to ¥161.0470.

The pound weakened versus the US dollar after the British Bankers’ Association said that loans granted for home purchases were down 65 percent in July from the same month in 2007, but there were 84 more mortgage loans granted in July than there were in June.

It took $1.8403 to buy a pound at late morning in New York.

The Australian and New Zealand dollars weakened against the yen as investors sold higher-yielding currencies as worries about credit-market losses continued, and they were also down versus the greenback.

It cost 85.75 cents US to buy an Australian dollar and the Aussie was worth ¥94.1032 while the New Zealand dollar was worth 69.74 cents US and ¥76.536.