The U.S. dollar gained Wednesday, aided by a report that showed existing home sales rose more than expected last month.
The U.S. currency was also up versus the euro as a European Central Bank policy maker indicating that the door remained open to a further cut in official interest rates, pressuring the region's shared currency.
The dollar index (DXY 80.41, +0.28, +0.35%) , a measure of the greenback against a trade-weighted basket of major currencies, stood at 80.431, up from 80.091 late Tuesday.
Erkki Liikanen, a member of the ECB's Governing Council, reportedly told the Finnish business publication Kauppalehti that the European Central Bank's current key lending rate of 1% -- an all-time low -- is "appropriate" for the current economic situation.
But room remains to lower the rate further if needed, Liikanen said, according to news reports.
The euro bought $1.3903 in recent action, compared to $1.3984 in late North American dealings Tuesday.
Rising expectations that the worst of the U.S. recession is over enabled the dollar to rise against the Japanese yen. The greenback rose to 95.50 in earlier trading, from 94.91 yen on Tuesday. It recently changed hands at 95.24 yen.
The dollar added to Wednesday gains after the National Association of Realtors said sales of existing homes rose 2.9% in April to a seasonally-adjusted annual rate of 4.68 million units, close to what economists surveyed by MarketWatch. Sales have been being roughly unchanged for six months. See more on home sales.
DXY 80.41, +0.28, +0.35%
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In recent months, the Japanese yen has been under the most stress among major currencies as rising equities have encouraged traders to take on more risk and sell the low-yielding currency for higher-yielding ones. The dollar has also fallen for the same reason, but to a lesser extent.
Analysts have said that's due to expectations the U.S. will recover from the economic downturn earlier than many other countries, and its currency can resume benefiting from growth and interest in investing in the U.S.
The British pound, meanwhile, continued to benefit from rising risk appetites to trade above the $1.60 level for the first time since November.
