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Updating time :     17/11/2006 19:02 GMT

Dollrar falls on worse-than-expected U.S. housing data

Dollar fell on Friday after reports of U.S. housing data indicated a sharp slowdown in the pace of U.S. home-building and suggested that the Federal Reserve would keep interest rates unchanged in the January FOMC meeting. U.S. building permits fell by 6% to 1.54 million units in October while housing starts only registered 1.49 million units after September's 1.74 million units.   
  
The greenback's decline accelerated in mid-morning U.S. session after unconfirmed rumours of financial trouble at a large U.S. hedge fund located in Chicago that racked up huge losses in oil/natural gas trading this month.  
  
In addition, some investors also squared part of their long dollar positions ahead of a weekend meeting of Group of 20 finance ministers in Australia, fearing a possible discussion on global imbalances and recent Japanese yen's weakness.   
  
As a result, euro and cable rebounded strongly from 1.2762 and 1.8835 to intra-day highs of 1.2846 and 1.8968 respectively. The greenback also retreated from 1.2537 to an intra-day low of 1.2420 against Swiss franc. Usd/jpy fell from 118.47 to an intra-day low at 117.51 before recovering on a news report that an earthquake hit southwestern part (near Amami area) of Japan.  
  
Monday will see the release of U.K. Rightmove house prices and CBI data, German PPI, Canadian wholesale trade as well as U.S. leading indicators.

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