Dollar Sinks Ahead of Housing Report

Tuesday, March 25, 2008 6:54 AM

BERLIN -- The dollar was mostly lower in early trading Tuesday ahead of a report on U.S. housing that is expected to show further declines.

The 15-nation currency bought $1.5550 in midmorning trading compared with $1.5418 in trading Monday when markets in Europe were closed for the Easter holidays.

There was little economic data from the euro zone on Tuesday but on Wednesday, Germany's Ifo institute will release its monthly survey of German investor sentiment, including a six-month forecast of business confidence in Europe's biggest economy.

"With currency markets doubtless distorted by thinner volumes over the long weekend break, many will be eyeing today's return to work with interest, looking to see if the recent shift against the dollar can be sustained as we move toward the end of the quarter," said James Hughes of CMC Markets in London.

"There was little on the economic calendar yesterday but the release of the U.S. existing home sales figures for February did draw some attention, coming in higher than expected," he said.

The Standard & Poor's/Case-Schiller home-price index is to be released Tuesday, with further declines for the 12 months ended January expected.

The National Association of Realtors said Tuesday that sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of just more than 5 million units. In the previous six months, sales had fallen, something analysts had been expecting again last month.

The dollar was lower against the Japanese currency, buying 100.52 yen Tuesday, down from the 101.01 Japanese yen it bought on Monday.

The British pound traded for $1.9924 on Tuesday, up from from the $1.9841 it purchased Monday.

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