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Dollar remains lower vs. rivals after downbeat U.S. data

Published 02/25/2015, 10:52 AM
Updated 02/25/2015, 10:52 AM
© Reuters.  Dollar still broadly lower on weak U.S. data, Yellen remarks

© Reuters. Dollar still broadly lower on weak U.S. data, Yellen remarks

Investing.com - The dollar remained broadly lower against a basket of other major currencies on Wednesday after downbeat U.S. new home sales data and as Tuesday's remarks by Federal Reserve Chair Janet Yellen continued to weigh.

In a report, the U.S. Commerce Department said new home sales fell by 0.2% to 481,000 units last month, compared to expectations for a decline of 1.3% to 475,000. New home sales in December were revised up to 482,000 units from a previously reported 481,000 units.

On Tuesday, Fed Chair Yellen said it was “unlikely” that economic conditions would warrant an interest rate increase for “at least the next couple of FOMC meetings”.

In prepared remarks during testimony to the Senate Banking Committee, Yellen added that if the economy keeps improving as the Fed expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.

The remarks prompted investors to push back expectations for a mid-year U.S. interest rate hike.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.24% at 94.30.

EUR/USD was last up 0.15% to 1.1356 after rising as high as 1.1388 earlier.

The single currency remained under pressure as lingering doubts over the agreement to extend Greece’s bailout by four months kept investors cautious.

Both the International Monetary Fund and the European Central Bank warned Tuesday that Greece’s reform plans are not detailed enough and said Athens will need to do more to secure the release of further bailout funds.

The dollar edged lower against the yen and the Swiss franc, with USD/JPY down 0.08% at 118.86 and with USD/CHF slipping 0.12% to 0.9493.

In other trade, sterling rose to two-month highs, with GBP/USD up 0.25% to 1.5491.

The commodity exposed Australian and New Zealand dollars strengthened after data earlier showed that Chinese factory activity edged up to a four-month high in February.

China’s HSBC manufacturing purchasing managers' index inched up to 50.1 from 49.7 in January, just above the 50 level separating growth from contraction.

NZD/USD was up 0.77% to 0.7550, while AUD/USD gained 0.81% to trade at 0.7894. The Canadian dollar also remained higher, with USD/CAD down 0.48% to 1.2427.

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