Dollar strong on positive housing data

Published: 20 Aug at 5 AM Tags: Euro, Dollar,

Positive US housing figures have helped to hold the dollar at an eleven-month high. The dollar index recently touched 81.899 before falling back to 81.870, the highest it has been since last September. The housing figures suggest that the world’s largest economy is continuing on its road to recovery.

Building permits and housing starts recovered well during July following disappointing figures last year. The euro has been pushed to its lowest level in nine months. The single currency is currently worth $1.3321.

The euro has been hit by concerns that sanctions imposed on Russia by the West because of the troubles in Ukraine will impact Europe more than the US because of the closer ties between Europe and Russia.

The euro is also struggling as a number of nations attempt to reduce debt through tight fiscal policies. A number of analysts believe the common currency could slip below $1.30. The dollar has also hit a three-week high against the yen to trade at 102.97 yen.

The British pound has dropped to a four-month low of $1.6619. Sterling is under pressure because inflation appears to be slowing. This means the Bank of England is unlikely to feel the need to push up interest rates in the near future.