The Dollar lost part of its rally against the Euro and against the pound. Other major counterparts remained almost unchanged during yesterday's trading. The EUR/USD is currently trading near 1.2330. The pair was trading above 1.2400 during yesterday's late session. almost 150 pips higher than its five months record low.
The gains in the Euro came after the TIC report signaled a sustained economic recovery. Thereafter, another report showed home builders are more optimistic about house sales. Normally better than expected reports should strengthen the local currency, in this case the Dollar. However, in the current economic conditions the U.S. is still considered the leader of the global economy. Therefore, as long as positive results continue to arrive from the U.S., investors believe other countries economic conditions would improve including Europe. Consequently, surprisingly good results from the U.S. might actually support other riskier currencies.
Today, traders are advised to follow reports published one hour before New York trading begins. Higher Building Permits data could raise investors' confidence and a higher than expected Producer Price Index (PPI), should support the USD.