The dollar weakened versus other majors Monday in New York as traders continued to express renewed interest in the higher-yielding euro and Canadian loonie. With risk appetite picking up on surging equities, traders shrugged off a warning from Euro area officials that a significant economic recovery will not get underway until 2010.
Also considered were a pair of economic reports from the US, where many analysts have begun to see green shoots in the barren economic landscape.
With many first-time buyers taking advantage of historically good housing affordability conditions, the National Association of Realtors released a report on Monday showing a notable increase in pending home sales in March.
The report showed that NAR's pending home sales index rose 3.2 percent in March following a downwardly revised 2.0 percent increase in February. Economists had expected the index to come in unchanged following the 2.1 percent increase originally reported for the previous month.
The U.S. Commerce Department said Monday that the amount of spending on new construction projects rose 0.3 percent in March compared to the previous month, climbing to a seasonally-adjusted annual rate of $969.7 billion.
With light on the economic horizon, the safe-haven dollar suffered across the board. The buck dropped to a monthly low of 1.3424, giving back its early gains as US stocks continue to rally. Still, on a longer-term basis, the dollar has managed to stay in a range between 1.2800 and 1.3500 for the past month.
Monday, the European Commission sharply lowered the GDP outlook for the euro area in its Spring Forecast, and expects the EU economy to broadly stabilize on support measures in 2010 after experiencing the deepest recession in the post-war era this year.
Elsewhere, German retail sales unexpectedly dropped in March as fears of rising unemployment weighed on households' spending intentions.
Markets in London were closed, but the dollar still saw movement against the sterling, dropping to 1.5000 from an early mark of 1.4860. The buck has been drifting lower over the past few weeks, re-approaching its multi-month low of 1.5068, set on April 16.
The buck gave back a fraction of its recent gains versus the yen, easing to 98.70 from its range just below the century mark. The buck rose to a 2-week high of 99.56 on Friday, before leveling off.
Meanwhile, the dollar continued its downtrend against the resurgent loonie, which has been boosted of late by rising metal prices. The dollar dropped through support to 1.1760, its lowest level since last November.
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