Dollar Erases Earlier Losses on Monday, Unable to Outperform Yen

The US dollar started the week soft, falling against basically all its major peers. But the greenback managed to turn the momentum up following the release of a very positive housing report. Now, the US currency trades either higher, or at least flat versus most of rivals, though the Japanese yen was a major exception.

With plenty of events ahead during the week, investors were reluctant to purchase the dollar. Yet the US housing data changed it, showing a big increase of new home sales. In fact, the sales reached the highest level in a decade.

Not all currencies surrendered to the dollar, though, as the yen maintained its gains versus the US currency. Analysts explained that by signs the era of ultra-loose policy in Japan may be coming to an end.

EUR/USD was up from 1.1924 to 1.1960, the highest level since September 22, intraday but retreated to 1.1900 as of 19:06 GMT today. GBP/USD traded at 1.3318 after opening at 1.3325 and rising to the daily high of 1.3382. At the same time, USD/JPY was down from 111.52 to 111.05, and its daily low of 110.83 was the weakest level since September 15.

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