U.S Pending Home Sales on Tap

By IBTimes Staff Reporter | August 03 2010 10:20 AM

The U.S. dollar fell versus its major rivals on Tuesday amid concerns over the strength of the U.S. economic recovery. The greenback was trading low against the EUR and yen on speculation that a slowing U.S. economy will prompt the Federal Reserve to increase stimulus measures.

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The U.S. currency struggled after Federal Reserve Chairman Ben Bernanke said on Monday that the economy has yet to recover fully and monetary policy must remain accommodating. The USD hit a 6 month low of $1.3230 against the euro, while against the Japanese yen the dollar fell to 85.86 it's weakest since November 2009.

The greenback has slid over the past month after a run of disappointing U.S. data fuelled expectations that U.S. growth could lose momentum as official stimulus is withdrawn. The high point of the day ahead will be the Pending Home Sales figure.

The National Association of Realtors (NAR) Pending Home Sales Index for July, set to be released at 14:00 GMT, should stabilize after plunging in June. If the actual results meet the market's expectations, EUR/USD may go as low as 1.3100-1.3150.