RTTNews - The euro gave back some early gains against its major counterparts on Monday morning in New York as a rally in global stocks fizzled, limiting risk appeal. The European currency slipped off of multi-week highs against the dollar and yen with the retreat.
The 16-member currency saw early strength after an encouraging German consumer confidence report suggested a recovery in the economy. The common currency surrendered some of an early gain against the dollar after a better-than-expected housing report led traders to bet the U.S. economy may be on the road to recovery.
The Commerce Department reported U.S. new home sales jumped 11 percent to an annual rate of 384,000 in June from the revised May rate of 346,000. Economists had expected sales to rise to 352,000 from the 342,000 originally reported for the previous month.
The euro turned slightly lower against the dollar after earlier reaching an eight-week high of 1.4297. The pair moved near 1.4210 in the early afternoon. A move above 1.4340 would take the euro to its highest level since last December.
The euro also turned to the downside against the British pound, moving near 0.8620. The European currency had topped 0.8680 in the morning. Overall, the pair has been range-bound for about 10 days.
The quarterly report from the Bank of England said the continued asset purchases in the second quarter were accompanied by signs of improvement in the corporate credit markets.
The euro climbed to a monthly-high of 0.8621 against the Japanese yen before paring some of the rally. The common currency has been trending higher for about five days.
According to the latest consumer climate survey from the market research firm GfK, the forward-looking consumer sentiment index rose to 3.5 points for August. The reading for July was slightly revised to 3 from 2.9 points. Economists expected the index to stay at 2.9. Although, the index for August strengthened, sentiment remained at a very low level in a longer term comparison.
At the same time, income expectations in July reached positive territory for the first time since April 2008, with the index rising to 1.8 from minus 3.3 in June. Sentiment regarding incomes improved on disappearing inflation and possibly due to an average increase of 2.4% in pension as of July 1. Further, lower health insurance premiums and income tax relief triggered by stimulus eased the situation.
A report from the European Central Bank said today the annual growth of the M3 money supply slowed further to 3.5% in June from 3.7% in the preceding month. Economists expected the growth to be 3.9%.
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