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US dollar dips for second day in a row on profit taking

Wednesday, December 23, 2015 - 07:13
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After the worst annual performance since 2011 for currency managers, exaggerated price swings during the first two trading days of the year have traders on alert.

[NEW YORK] The US dollar retreated against the euro and the yen on Tuesday for the second straight session in a decline attributed to profit taking after making big gains in 2015.

Data from the Commerce Department showed US economic growth at the expected 2.0 per cent level in the third quarter behind a solid 3.0 per cent increase in personal consumption expenditures.

A report from the National Association of Realtors showed a big drop in existing-home sales in November, but that was partly due to new mortgage disclosure rules that slowed home closing times.

Analysts described the foreign exchange market as choppy this week with many traders on holiday and economic newsflow relatively light.

"The dollar may struggle to post any major gains ahead of the New Year," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

"There remains little appetite ahead of the New Year among investors to add any major positions to their books. Most traders were content to book profits on their long-US dollar trades following the greenback's rally in the wake of this month's Fed interest rate hike."

AFP