The greenback recovered from its earlier losses against the majors as the US equity bourses slipped into negative territory by afternoon trading. The dollar bounced off its near 2-month lows versus the euro near the 1.43-level and recovered slightly after touching a new 10-month low against the Canadian dollar at 1.0781.
The June new home sales report blew away consensus estimates, posting its largest advance in 8-years, increasing to 384,000 units and up 11% on the month. The data reinforced sentiment that the US economy is beginning to bottom out. The reports slated for release during the week include the Richmond Fed manufacturing survey, the Conference Board's consumer confidence survey, durable goods orders, weekly jobless claims, Q2 GDP and the July Chicago PMI. Forecasts for this week's reports predominantly reveal improving fundamentals, which are likely to be positive for stocks and detrimental to the dollar.
Euro Relinquishes Gains
The euro climbed just shy of the 1.43-handle against the dollar - its highest level in 7 Ã‚Â½-weeks early in the New York session before succumbing to pressure in the stock market and drifting toward the 1.42-figure. Economic reports from the Eurozone were better than expected with Germany's GfK consumer sentiment survey rising for its 3rd consecutive month to a 14-month high at 3.5 in August, improving from 2.9 a month prior. Germany's June import prices edged up by 0.4% in June, compared with a flat reading a month earlier and down 11.3% on an annualized basis versus a 10.4% decline a year earlier.
EURUSD holds steady near 1.4240, with interim resistance eyed at 1.4270 followed by 1.43 and 1.4340. Subsequent ceilings will emerge at 1.4365, backed by 1.44 and 1.4450. On the downside, support begins at 1.42, followed by 1.4170 and 1.4130. Additional losses will target 1.41, backed by 1.4050 and 1.4020.