Dollar slips against major currencies on better-than-expected rise in new home sales

Dollar slips on strong rise in home sales

NEW YORK — The dollar fell Monday after the U.S. government reported a better-than-expected rise in new home sales.

Markets also continued to weigh “stress test” results released Friday for 91 European banks. European regulators said only a handful of banks failed the test, though there is skepticism because few details are known about how rigorous the tests were.

In late New York trading, the euro edged up to $1.2989 from $1.2922 late Friday. The British pound rose to $1.5477 from $1.5425, while the dollar dropped to 86.87 Japanese yen from 87.42 yen.

“Markets are still quite negative on the U.S. economic outlook, and … are also relieved that stress tests, however flawed, have finally been released,” Win Thin, senior currency strategist at Brown Brothers Harriman, wrote in a note to investors. Still, the euro seems unable to stay above $1.30, an important psychological level, he said.

The Commerce Department said sales of new homes increased to an annual rate of 330,000 units in June, ahead of the estimates of economists polled by Thomson Reuters. The gain came after sales hit a record low in May.

Investors also found comfort in news that shipping giant FedEx Corp. raised its profit outlook. FedEx is seen as an economic bellwether since companies tend to ship more when their orders increase.

Upbeat news about the economy tends to weigh on the dollar as investors dump the safe-haven currency for riskier assets.

In other late trading Monday, the dollar slipped to 1.0343 Canadian dollars from 1.0368 Canadian dollars, and dropped to 1.0491 Swiss francs from 1.0519 francs. The U.S. currency also fell against the Australian and New Zealand dollars and the Nordic currencies.