BLBG:Dollar Falls on Easing Speculation Before U.S. Home Sales Data
The dollar weakened against most major counterparts amid speculation the Federal Reserve will introduce more measures to lower borrowing costs to stimulate the economy.
The Dollar Index retreated before a private report that economists say will show U.S. sales of existing homes dropped last month. Fed Bank of New York President William C. Dudley said yesterday there’s more the central bank could do to boost the economy. The euro is poised for its third-straight weekly drop amid concern European policy makers can’t halt the region’s debt crisis from spreading to larger economies including Spain, Italy and France.
“Easing is a possible option for the Fed, and market movements reflect that,” said Teppei Ino, an analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s biggest financial group by market value. “Speculation of quantitative easing has a weakening effect over the dollar.”
The dollar slid 0.3 percent to $1.3492 per euro as of 12:05 p.m. in Tokyo from the close in New York yesterday, trimming its weekly gain to 1.9 percent. The greenback was lost 0.1 percent to 76.93 yen. The euro advanced 0.2 percent to 103.80 yen, having lost 2.2 percent over the past five days.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, lost 0.2 percent to 78.142, reducing its weekly advance to 1.6 percent.
U.S. sales of existing homes dropped for a second month in October, sliding 2.2 percent from the previous month, according to a Bloomberg News survey of economists. The National Association of Realtors will release the data on Nov. 21.
“I am deeply unhappy with the current forecast of prolonged high unemployment, and will continue to review whether there is more that we could do that would bring more benefit than cost,” Dudley said in West Point, New York. “If additional asset purchases were deemed appropriate, it might make sense to do much of this in the mortgage-backed securities market.”
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
