FOREX-U.S. housing, consumer confidence data support dollar

Tue Jun 24, 2014 3:51pm EDT

Related Topics

* U.S. new home sales, consumer confidence data beat expectations

* Dollar gains against euro, yen

* Sterling weaker after Bank of England comments (Updates prices, adds comments, U.S. Treasury note prices)

By Sam Forgione

NEW YORK, June 24 (Reuters) - The U.S. dollar edged higher on Tuesday after stronger-than-expected U.S. housing and consumer confidence data increased expectations of a more hawkish tone from the Federal Reserve.

The Commerce Department said sales of new single-family homes surged 18.6 percent to a seasonally adjusted annual rate of 504,000 units in May, the highest since May 2008 and the biggest increase since January 1992.

The Conference Board said its index of consumer attitudes rose to 85.2 in June from a downwardly revised 82.2 in May.

"The good housing data may diminish the worries that some dovish FOMC members have had about housing," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York, referring to Fed policymakers.

Wizman said inflation data would be more crucial in influencing the Fed's stance on monetary policy. Traders are watching for signs of when the Fed will begin hiking U.S. interest rates from rock-bottom levels.

The U.S. dollar index, which measures the dollar against a basket of six major currencies, was last up 0.07 percent at 80.333. The euro was last down 0.02 percent at $1.3601, while the dollar was flat against the yen at 101.92 yen.

The benchmark 10-year U.S. Treasury note was up 11/32 in price to yield 2.579 percent.

The dollar was last down 0.03 percent against the Swiss franc at 0.8941 franc, while the pound fell 0.27 percent against the dollar at $1.6977 after Bank of England chief Mark Carney did little to bolster interest rate hike expectations.

Carney, his deputy Charlie Bean and Monetary Policy Committee member David Miles told lawmakers the UK economy had spare capacity that needed to be used before rates rose.

The currency last traded near a one-week low after rising to its highest in nearly six years last week against the dollar after Carney said rates may rise earlier than markets were predicting.

"This is a market that had been buying the pound, and is now lightening up after a lack of satisfaction to the Bank of England's comments," said Lane Newman, director of foreign exchange at ING Capital Markets in New York. (Reporting by Sam Forgione; Additional reporting by Anirban Nag in London; Editing by James Dalgleish and Dan Grebler)

FILED UNDER: