FOREX-U.S. dollar gains on reduced Ukraine-Russia concerns, housing data

Mon Aug 18, 2014 4:02pm EDT

Related Topics

* Dollar rises following talks between Ukraine, Russia

* Positive U.S. housing data supports dollar

* Pound gains on BoE Governor Carney's comments

* Eyes on FOMC minutes, Jackson Hole central bankers' conference (Updates prices, adds comments)

By Sam Forgione

NEW YORK, Aug 18 (Reuters) - The U.S. dollar rose against a basket of major currencies on Monday after the threat of increased tensions in Ukraine appeared to diminish and positive U.S. housing data supported the greenback.

The conflict between Russia and Ukraine was viewed as somewhat less heated following talks among Russia, Germany, France and Ukraine on Sunday. Russia said all objections to it sending a humanitarian convoy to Ukraine had been resolved, but no progress was made toward a ceasefire between government and rebel forces in the east of the country.

However, the region remained unsettled as Ukraine accused pro-Russian rebels on Monday of hitting a refugee convoy of buses with rocket fire near the eastern city of Luhansk, but the separatists denied responsibility.

"The fact that you didn't see any further escalation over the weekend - even if things didn't get a whole lot better - was already seen as a positive signal," said Ian Gordon, FX strategist at Bank of America Merrill Lynch in New York.

Data showing U.S. home builder sentiment rose in August to its highest since January supported the dollar. The NAHB/Wells Fargo Housing Market index rose to 55 in August from 53 in July, the group said. It was the third straight monthly gain and topped the mean estimate of analysts polled by Reuters for a reading of 53.

The euro was last down 0.28 percent against the dollar at $1.33615. The dollar was last up 0.19 percent against the Japanese yen at 102.53 yen, and was up 0.47 percent against the Swiss franc at 0.9062 franc.

The U.S. dollar index, which measures the dollar against a basket of six major currencies, was last up 0.18 percent at 81.570.

The British pound was last up 0.2 percent against the dollar at $1.6728 following comments from Bank of England Governor Mark Carney that he would not have to wait for real wages to turn positive before raising interest rates.

"It was a much bigger comment than the underlying price movement showed," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. He said the pound would likely continue to rally.

Yields on U.S. Treasuries rose. The yield on Benchmark 10-year U.S. Treasury notes was last at 2.39 percent, from 2.35 percent late on Friday.

Analysts looked ahead to Wednesday's release of minutes from the Federal Reserve's July policy meeting and comments from a global central banking summit in Jackson Hole, Wyoming, starting on Thursday, although expectations were that the Federal Reserve would remain dovish on monetary policy.

"The (Fed's) view that there is still a lot of slack in the labor market is winning out," said Bank of America's Gordon. "The overall tone of the committee is going to be a cautious one."

(Reporting by Sam Forgione; Editing by Dan Grebler)

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