According to a new report released yesterday, new home sales in the U.S. have fallen to a 7-month low. Despite the numerous positive indicators that have been released in recent weeks regarding the U.S., investor confidence in the American recovery was dampened due to the housing report. Causing further damage, a revised figure for November's new home sales shows that that month's figure was actually lower then originally stated.

After rising to a 3 1/2 month high against the Euro at 1.4216 on Tuesday, the Dollar has since fallen and is currently trading at around the 1.4345 level. USD/JPY also saw downward movements following the report, and is currently trading at approximately 91.50.

Trading today could become volatile for the greenback, as several news events may determine the direction the currency takes in the near future. The Core Durable Goods Orders and this week's Unemployment Claims Report are both set to be released at 13:30 GMT. If the numbers keep in line with the forecasted figures, the Dollar may be able to reverse some of its losses. If the numbers fall below predictions, the Dollar may drop further ahead of the Christmas holiday.