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

Mon Aug 18, 2014 10:51am 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 (Updates prices, adds comments, changes dateline; previous LONDON)

By Sam Forgione

NEW YORK, Aug 18 (Reuters) - The U.S. dollar rose against a basket of major currencies on Monday on reduced concerns over Russia and Ukraine and positive U.S. housing data.

Tensions between Russia and Ukraine were viewed as 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.

"The market was a little bit concerned that things could flare up in the Ukraine region over the weekend, and the fact that they haven't has made the market relax a little bit," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

The dollar sold off on Friday against the yen and Swiss franc on risk aversion after Ukraine's president said artillery had destroyed part of a Russian armored column that had crossed into Ukraine during the night. The yen and Swiss franc tend to benefit in times of global tension because of their deep liquidity.

Data showing U.S. home builder sentiment rose in August to its highest since January as labor market conditions improved also 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.

"People had a downbeat view of housing, so this is suggesting it's normalizing, not collapsing," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York, in reference to the U.S. housing market.

The euro was last down 0.28 percent against the dollar at $1.3363. The dollar was last up 0.22 percent against the Japanese yen at 102.58 yen, and was up 0.42 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 0.19 percent at 81.577.

The British pound was last up 0.14 percent against the dollar at $1.6713 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.

"There's certainly a belief in the market that the UK could be one of the first to start raising rates," said Chapdelaine's Borthwick.

Yields on U.S. Treasuries rose, supporting the dollar, after they plunged on Friday on worries about Ukraine and Russia. Benchmark 10-year U.S. Treasury notes were last down 11/32 in price to yield 2.38 percent, from 2.35 percent late on Friday. (Reporting by Sam Forgione)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.