The U.S. dollar extended early rally against most major counterparts in New York deals on Tuesday, after the nation’s consumer confidence improved in August and new home sales rebounded notably in July, while the Chinese central bank’s unexpected rate cut to stem the stock-market slide also buoyed the investors.
The Commerce Department released a report showing a notable rebound in new home sales in the month of July.
The report said new home sales jumped to an annual rate of 507,000 in July, 5.4 percent above the revised June rate of 481,000. Economists had expected new home sales to climb to a rate of 516,000.
Data from the Conference Board showed that consumer sentiment increased to 101.5 in August, up from expectations of 93.4. In July, the index came in at 90.9.
The People’s Bank of China slashed the interest rates by 0.25 percentage points each, according to a statement on its website. The benchmark one-year lending rate was cut to 4.6 percent and the deposit rate was slashed to 1.75 percent.
The renminbi deposit reserve ratio was lowered by 0.5 percentage points, effective September 6. The bank said the reduction was intended to maintain reasonably adequate liquidity in the banking system, and promote steady moderate growth of money and credit.
The greenback was trading higher at 1.1438 against the euro, 0.9452 against the franc and 1.5725 against the pound, coming off from early lows of 1.1624 and 0.9310, and more than a 2-month low of 1.5832, respectively. The greenback may possibly face resistance around 1.12 against the euro, 0.96 against the franc and 1.56 against the pound.
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