Dollar Rebounds As Equities Slump Tuesday

By @ibtimes on

RTTNews - The dollar was mostly stronger versus other major currencies on Tuesday as stocks dropped despite another round of relatively encouraging housing data.

Speculation that equities are in for a pullback following a recent run to multi-month highs has fueled a move back to the safety of the dollar and yen.

While Standard and Poor's released a report on Tuesday showing that U.S. home prices continued to decline at a significant annual rate in the month of May, the pace of decline in prices slowed for the fourth consecutive month.

The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 17.1 percent in May compared to the 18.1 percent decrease reported for April. Economists had expected the report to show that prices fell 17.9 percent year-over-year.

Consumer confidence deteriorated by more than expected in the month of July, according to a report released by the Conference Board on Tuesday, with the decrease reflecting less favorable assessments of both current conditions and the near-term outlook.

The Conference Board said that its consumer confidence index fell to 46.6 in July from an unrevised 49.3 in June. Economists had been expecting a much more modest decline by the index to a reading of about 49.0.

The dollar spiked higher versus the euro after testing its 2009 low in early dealing. The buck improved to 1.4150, staying away from June's 7-month low of 1.4338.

Meanwhile, the buck jumped versus the loonie, putting a stop for now to a relentless downtrend. By improving to C$1.0880, the dollar moved away from a 10-month low of C$1.0749, set overnight.

Against the sterling, the dollar firmed up a bit to 1.6450, but remained well within a narrow two-month trading range.

On the flip side, the buck hit the skids versus the yen, slipping to a weekly low of 94.03 from a monthly peak of 95.36.

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