The dollar rose broadly on Tuesday after a report showed an unexpected rise in US new-home sales in April, while data out of Europe raised concerns over the health of the eurozone economy. Demand for the European currency started to dim on news French business confidence slumped to a 2-1/2-year low this month.
While the forward-looking German GfK index pointed to an unexpected deterioration in consumer morale in June. The data cast doubts over whether the European Central Bank would contemplate raising interest rates to tame inflation this year. "Recent data out of Europe doesn't support the euro," said Matthew Strauss, a currency strategist at RBC Capital Markets in Toronto. "If the outlook in the region continues to deteriorate the ECB eventually may have to change its neutral stance on rates and adopt a more dovish tone."
The euro then slipped to a session low of $1.5702 in New York after a report showed US sales of newly constructed single-family homes rose 3.3 percent in April to a 526,000 annual rate, above markets expectations.
In late morning trading the euro was last down 0.3 percent at $1.5722. A drop in oil prices from record highs also lifted the dollar, analysts said. The dollar index gained 0.4 percent to 72.234. The greenback also rose against sterling, pushing the British currency down nearly 0.4 percent to $1.9750.