The Dollar rose broadly on Tuesday after Oil prices fell and a report showed an unexpected rise in US new home sales in April, boosting expectations the economic slowdown is not as bad as feared. Meanwhile, data out of Europe raised concerns over the health of the euro zone economy. Demand for the European currency started to slow on news French business confidence slumped to a 2-1/2-year low this month while the forward-looking German GfK index pointed to an unexpected deterioration in consumer morale in June.

The Euro went lower after a report showed US new Home rose 3.3% in April to a 526K annual rate, above markets expectations. In another report, U.S. consumer confidence plunged unexpectedly to a 16-year low, 57.2 vs 62.3 in May, amid rising gasoline costs and falling home prices. At the same time, inflation expectations rose to an all-time high of 7.7 percent.

ECB Governing Council member Klaus Liebscher said recent data hints at lower euro zone growth this year and next, but it is too soon to say inflation has peaked. Another ECB governing member, Axel Weber, also on Tuesday said the prospect of an interest rate cut by the ECB this year was wishful thinking. While an economic slowdown may be just beginning in the euro zone, in the United States some investors hope the worst is over and the Federal Reserve's steep 325bp interest rate cuts since September prove sufficient to provide the stimulus needed to reinvigorate the economy.

Yesterday, EurUsd was down 0.58% at 1.5689. UsdCad rose for a fourth day as Oil prices declined. It last traded up 0.33% at 0.9940. UsdJpy gained 0.83% at 104.24 as investors are taking more risk and borrowed the low yielding Yen to fund purchases of higher yielding currencies. Japanese Yen also fell against Euro and Sterling. EurJpy was up 0.25% to 163.52 while GbpJpy was up 0.45% to 205.84. UsdChf jumped 0.91% to 1.0337. GbpUsd went 0.37% lower to 1.9750.