RTTNews - The dollar continued to take a beating at the hands of most other major currencies on Tuesday, extending its multi-month lows amid optimism that the worst of the global recession is in the rear-view mirror.
Even with Treasury Secretary Tim Geithner reiterating in China that the US has a strong dollar policy, the buck remained in free-fall against the euro and sterling. Increased risk appetite has driven interest in higher-yielding currencies over the past two months.
Green shoots became visible on the housing front Tuesday. With homebuyers responding to very favorable market conditions, including record low mortgage interest rates, a report released by the National Association of Realtors on Tuesday showed that pending home sales increased by much more than expected in the month of April.
The report showed that the pending home sales index rose 6.7 percent to 90.3 in April from a reading of 84.6 in March. Economists had been expecting a much more modest increase by the index of about 0.5 percent.
The dollar slipped to 1.4313 versus the euro, its lowest level since the final week of 2008. Its been a brutal stretch for the dollar, which has dropped around 10 cents in the past 2 weeks.
Official statistics showed that unemployment in the Eurozone rose to its highest level in nearly ten years in April as the global economic downturn left several Europeans without work.
The dollar dropped to a new 6-month low of 1.6591 versus the sterling, extending its dramatic move away from January's 23-year high of 1.3501.
Meanwhile, the dollar continued its run of choppy trading versus the yen, slipping to 95.60. The pair has been stuck in the mud for the past few weeks, with traders finding reasons to sell the lower-yielding currencies in favor of the euro and sterling.
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