Forex: Tuesday’s review

Yesterday the dollar rose against the euro and the yen as U.S. economic data indicated a strengthening recovery, undermining the case for more stimulus from the Federal Reserve.

The U.S. currency gained from the lowest level this month against its 17-nation European counterpart as reports showed home-prices declines slowed and consumer confidence this month stayed close to the highest level in a year. The Dollar Index dropped 0.9 percent during the past two days amid speculation the Fed will start a third round of quantitative easing, or QE3. The S&P/Case-Shiller index of property values in 20 U.S. cities fell 3.8 percent from a year earlier, matching the median forecast of 32 economists, after decreasing 4.1 percent in December, a report from the group showed in New York. The Conference Board’s confidence index dropped to 70.2 from a revised 71.6 reading in February that was higher than initially reported, figures from the New York-based private research group showed. The median forecast of economists called for a decrease to 70.

The yen has depreciated 10.8 percent this year, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has fallen 2.7 percent, and the euro has gained 0.4 percent.

EUR/USD: yesterday the pair decreased after growth on Monday.

GBP/USD: yesterday the pair traded in a range $1.5940-$1.6000.

USD/JPY: yesterday the pair continued restoration, closed day above Y83.00.

European data starts at 0530GMT with the details of Q4 GDP from France. This is followed by the 0800GMT release of EMU M3 money supply data. UK data for 0830GMT sees Q4 GDP, Balance of Payments and also the Bank of England's Financial Policy Minutes. UK data also sees the 1000GMT release of the latest Land Registry House Price Index. US data starts at 1100GMT with the MBA weekly mortgage applications, which are followed at 1230GMT by durable goods orders, which are expected to rebound 2.9% in February after falling a revised 3.7% in January. The weekly EIA oil stocks data is due at 1430GMT. Overnight,into 0100GMT Thursday, St. Louis Federal Reserve Bank President James Bullard speaks to a monetary policy conference at Tsinghua University in Beijing.