USD Edges up as Stocks Drift

The greenback recovered from its earlier losses against the majors as the US equity bourses slipped into negative territory by afternoon trading. The dollar bounced off its near 2-month lows versus the euro near the 1.43-level and recovered slightly after touching a new 10-month low against the Canadian dollar at 1.0781.

The June new home sales report blew away consensus estimates, posting its largest advance in 8-years, increasing to 384,000 units and up 11% on the month. The data reinforced sentiment that the US economy is beginning to bottom out. The reports slated for release during the week include the Richmond Fed manufacturing survey, the Conference Board’s consumer confidence survey, durable goods orders, weekly jobless claims, Q2 GDP and the July Chicago PMI. Forecasts for this week’s reports predominantly reveal improving fundamentals, which are likely to be positive for stocks and detrimental to the dollar.