The dollar weakened against its peers today following the release of data which revealed that US existing home sales increased in February below forecasts as doubt surrounding when the Fed will increase rates put further pressure diminishing demand for the greenback. US existing home sales were up by 1.2% to 4.88 million units in February from 4.82 million in January while experts forecast an increase of 1.7%.

Despite last week’s decline the dollar is still expected to strengthen as the market predicts the Fed will increase rates before other central banks. Tomorrow the US will release its report on inflation. Fed Chair Yellen cautioned last week that the dollar’s strength was increasing risk of deflation.

The euro strengthened against the dollar with the pair up over 1% trading over its 1.09 handle. The euro was supported by reports that Greek officials were close to satisfying the terms of its creditors with regards to its proposed reforms so that an additional bailout could be granted to prevent Greece from going bankrupt. The euro was stronger against the pound and the yen.

The pound weakened against the softer dollar after the Confederation of British Industry released data which revealed that its industrial order expectation index dropped from 10 in February to a reading of zero in March compounding forecasts of a down tick to 9. The pound had been boosted by data released last week revealing that UK public sector net borrowing increased less than forecast. The pound was weaker against the euro.

The yen strengthened against the dollar as the greenback was pressured by indications made last week by the Federal Reserve that a rate hike will likely occur later than the market had anticipated. The Bank of Japan broadened the scope of its stimulus program towards the end of October as officials feared that plummeting oil prices will heighten the risk of deflation. The pair should certainly break away from its tight range of late once the Fed decides to raise interest rates.

The Australian, New Zealand and Canadian dollars were widely stronger against the dollar. Both the Aussie and kiwi dollars advanced nearly 1% against the greenback while the loonie gained roughly 0.5%. The loonie had been bolstered by data released last week which revealed that Canada’s consumer price index increased by 0.9% in February ahead of forecasts for a 0.7% increase.

Disclaimer: This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.