LONDON, Aug 24: The dollar edged higher against the euro here on Thursday after a report on sales of new homes in the United States, while showing a significant drop, were seen by traders as not as bad as had been feared.
The single European currency in late-day trade was at $1.2774 against $1.2785 late Wednesday in New York.
The dollar was meanwhile trading at 116.37 yen after 116.38 on Wednesday.
The US Commerce Department reported earlier in the day that sales of new homes in the United States fell by 4.3 per cent in July, their largest decline since February.
But market players were relieved that the slide had not been more acute, particularly after the sharp fall in existing home sales that was announced on Wednesday.
“After the existing home sales data, the market had feared a much worse figure and the dollar has seen a bit of a relief rally on the back of that,” said Bear Stearns analyst Steve Barrow.
In other data Thursday, the government said sales of US durable goods fell 2.4 per cent in July, eclipsing Wall Street expectations of a slide of 0.8 per cent.
But traders focused on a component covering orders excluding transportation, which showed a rise of 0.5 per cent and boosted the dollar.
Earlier Thursday, the euro staged a brief rally, after the key Ifo survey on German business confidence came in above expectations, but failed to hold on to its gains.
Barrow said currency trading remains range-bound, with the euro stuck between 1.25 and 1.30 against the dollar ever since May.
Over the summer lull, investors have been betting on the ranges persisting, selling the euro when it gets up toward $1.30 and buying it when it goes down towards $1.25, which only serves to reinforce the trend, he said.
Elsewhere, the pound was also lower against the dollar, although it inched higher against the euro.
Attention on Friday will turn to the second estimate of British second quarter growth, with the market expecting momentum to be confirmed at 0.8 per cent from the first quarter and 2.6 per cent year-on-year.—AFP