By Myra P. Saefong and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch) — The dollar fell Tuesday, giving back the gains it saw a day earlier, pressured after U.S. data showed a fourth straight climb in home prices in July and a rise in the consumer-confidence gauge to its highest in seven months.
The data are “bullish for price stability, generally speaking, and pushes back on the deflation story which, in turn, would hurt gold prices,” said Richard Hastings, a macro strategist at Global Hunter Securities. “In this environment, the dollar is sold into commodities and gold.”
The euro, meanwhile, edged higher as investors stayed tuned to the sovereign-debt picture in Europe, awaiting news on a potential bailout from Spain.
The ICE dollar index DXY -0.18% , which measures the greenback’s performance against a basket of six currencies, slipped to 79.377 from 79.573 in North American trade late Monday. It was trading around 79.459 before the consumer-confidence data.
The WSJ dollar index XX:BUXX -0.12% , which tracks the U.S. unit against a slightly larger basket, traded at 69.36 from late Monday’s 69.51.
Early Tuesday, the S&P/Case-Shiller 20-city composite posted a 1.6% increase in July, following a 2.3% advance in June. It was the highest level in nearly two years. See: Home prices climb for a fourth month in a row.
Separately, a gauge of consumer confidence jumped in September to 70.3, the highest level since February, from a revised 61.3 in August. See: Consumer-confidence gauge rises to 7-month high.
“The dollar can’t get much of a lift this morning on stronger gold buying news, a surging yen, and the favorable housing price and consumer-confidence data,” said Hastings.
In the background of all of these points is the dollar-yen, which has dropped significantly from last week’s levels, he said.
Against the Japanese yen, the dollar USDJPY +0.0501% changed hands at ÂĄ77.86, down a bit from ÂĄ77.88 Monday. It climbed above 79 last week, according to Hastings.
“But this is not going to last and should result in some yen selling into dollars and euros and gold,” he said. At last check, gold futures GCZ2 +0.54% traded around 0.7% higher.
Euro strength
The euro EURUSD +0.1431% , which touched its lowest level since Sept. 12 on Monday, edged up to $1.2960 from $1.2923 late the prior day.
“We may spend all day deliberating about [quantitative easing] and fiscal cliff in the U.S., leveraging the [European Stability Mechanism] in Europe, but in the meantime, what we lack is any confidence about where stronger growth will come from,” he said.
At an industry conference in Berlin, European Central Bank President Mario Draghi said recent ECB efforts to stabilize the euro zone can only build a bridge to a more stable future in the currency zone. See: ECB efforts helping to support stable future.
Over in Spain, investors also awaited the expected release of the country’s budget plan and the results of detailed stress tests for Spanish banks. See: Spain: What investors need to know.
European and U.S. stocks traded mostly higher. Commodities prices also climbed.
Within other currency crosses, the British pound GBPUSD +0.13% rose to $1.6253 from $1.6211 in North America late Monday.
The Australian dollar AUDUSD +0.30% traded at $1.0452 from $1.0423 late Monday.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.
