RTTNews - The dollar surged versus most majors on Wednesday as another round of relatively encouraging data from the housing front signaled the US may lead the global economic recovery.

Conversely, the dollar also received support from its status as the world's safe haven currency after China said it is studying curbs on overcapacity in industries, fueling concerns about growth in that country.

With some traders expressing risk aversion and others thinking the US economy will recover faster than other major industrialized nations, the dollar gained significant ground against the euro and sterling.

The buck jumped to 1.4206 versus the euro, pulling safely away from an 8-month low of 1.4446 set early in August.

Meanwhile, the buck continued to make gains versus the sterling, rising to a 6-week high of 1.6032. The buck has gained nearly a full 10 cents since hitting a 10-month low of 1.7012 a few weeks ago.

With the price of oil continuing to drop toward $70, the dollar rose versus the petro-linked loonie. The buck rose to C$1.1000, pulling further away from a 10-month low of C$1.0630.

At the same time, the dollar was stuck in neutral versus the yen, holding near 94.10.

In economic news from the US, new home sales increased by much more than expected in the month of July, according to a report released by the Commerce Department on Wednesday, with the report providing further evidence of stabilization in the housing market.

The report showed that new home sales surged up by 9.6 percent to an annual rate of 433,000 in July from the revised June rate of 395,000. With the increase, new home sales rose to their highest level since September of 2008.

Also, mortgage applications increased in the week ending August 21, as demand for home refinancing loans hit its highest level since early June, according to a report released by the Mortgage Bankers Association.

Elsewhere, Germany's import prices declined the most in more than two decades in July as energy prices dropped, a report by the Federal Statistical Office or Destatis indicated on Wednesday.

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