Investing.com - The euro extended losses against the dollar on Tuesday, falling to two-month lows as upbeat U.S. housing data boosted the greenback and losses against the firmer pound also pressured the single currency lower.
EUR/USD was down 0.6% at 1.1153, the weakest level since March 23.
The dollar received a boost after data showing that U.S. new home sales soared to the highest level since the start of 2008 in April.
The Commerce Department said new home sales rose by 16.6% to an annual unit rate of 619,000 last month.
March's home sales were revised to show a 1.3% decline to 531,000 units, from a previously reported drop of 1.5%.
Economists' had expected a 2.0% rise from the initial March number to a total of 523,000 units.
Demand for the dollar continued to be underpinned after recent comments by Federal Reserve officials signaled that interest rates could rise in the coming months.
St. Louis Fed President James Bullard said Monday that more factors favored a gradual rate increase versus keeping them steady.
Separately, San Francisco Fed President John Williams said he still sees the central bank raising interest rates two to three times this year.
The remarks came after last week’s minutes of the Fed’s April meeting revived expectations for a rate hike as soon as next month.
The euro fell to three month lows against the pound, with EUR/GBP dropping 1.43% to 0.7636.
Sterling strengthened after a new opinion poll showed the ‘Remain’ campaign with a big lead with one month to go until the referendum on Britain’s European Union membership.
The latest ORB poll, published in Tuesday's Telegraph newspaper, showed that the “Remain’ campaign has a 13-point lead over the ‘Leave’ campaign.
Support for remaining in the EU stood at 55%, while support for Brexit was at 42%.
Sterling was also higher against the dollar following the report, with GBP/USD advancing 0.75% to 1.4590.
Bank of England Governor Mark Carney defended the central bank's decision to flag Brexit risks on Tuesday, after saying earlier this month there was a risk of recession.
Carney said the outcome of the June 23 referendum could require the BoE to make a big reassessment to how it sets interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.4% to a two-month high of 95.6.