RTTNews - The dollar stabilized Tuesday morning in New York, paring a small fraction of its big losses from last week amid renewed concerns that green shoots in the economic landscape may prove to be weeds.
The dollar has weakened over the past month as traders expressed some confidence that a global economic recovery could get underway by year's end. However, optimism has given way to caution today, boosting the safe haven buck across the board.
A pair of economic reports will likely influence sentiment the day after the long Memorial Day weekend.
The S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 AM on Tuesday. Economists expect an 18.4% year-over-year decline in the 20-city composite house price index for March.
The Conference Board is scheduled to release its consumer confidence report for May at about 10 am ET on the same day. The survey, which is based on a survey of 5,000 US households, is expected to show that the consumer confidence index rose to 42 in May.
The dollar rose to 1.3890 versus the euro Tuesday morning, an improvement from last Friday's 4 1/2 month high of 1.4050.
Results of a consumer climate survey by the market research firm GfK Group revealed that German consumer sentiment remained unchanged in May. The survey's forward-looking overall indicator showed a value of 2.5 points for June, matching May's reading.
The German economy contracted 3.8% on a sequential basis in the first quarter, which was the fourth straight quarter of decline and biggest fall since records began in 1970, the Federal Statistical Office said in a detailed report on Tuesday.
The dollar eked out modest gains against the sterling, rising a penny to 1.5846 after touching a new 6-month low overnight. Its been a brutal month for the dollar, which has moved well away from January's 23-year high of 1.3501.
Meanwhile, the dollar was in a holding pattern versus the yen Tuesday morning, staying near 95. Last week, the buck slipped to a 2-month low of 93.84 yen as traders preferred the Japanese currency as a safe have due to concerns the US may lose its AAA rating.
Geopolitical developments have driven risk aversion, giving the dollar a bit of a boost today. The U.N. Security Council strongly condemned North Korea's carrying out of its second nuclear test in defiance of international warnings and triggering a new crisis in the Korean peninsula, reports say.
The council said the nuclear test was a clear violation of existing council resolutions, and in an unanimous statement adopted just hours after Monday's nuclear test its members decided to begin work immediately on a new resolution.
For comments and feedback: contact email@example.com