Dollar Continues Assault On Reeling Yen, Hits 7-Month Peak

(RTTNews) - The dollar extended its seven-month peak versus the struggling yen on Wednesday, helped by another encouraging report from the U.S. housing sector.

With Europe and Japan facing economic hardship and the U.S. slowly picking up steam, traders are finding the dollar more attractive this week.

The dollar's biggest gains today were against the sterling, as markets were surprised to learn the extent of support for additional quantitative easing measures among U.K. policy makers.

The buck jumped to $1.5613 versus the sterling, up from yesterday's level near $1.58. Against the euro the dollar was stuck near $1.3225 despite some troubling economic news from the euro zone.

Eurozone private sector activity unexpectedly slipped back to contraction in February, fueling concerns that the economy may be sliding into a recession amid the region's prolonged debt crisis.

The composite output index fell to 49.7 in February from 50.4 in January. Economists expected the index to remain almost steady at 50.5.

Elsewhere, the Bank of England's recent decision to lift the asset purchase programme by GBP 50 billion in February was split, as two members called for larger stimulus, the minutes of that meeting showed Wednesday.

The dollar continued its assault on the yen, rising to Y80.30 -- its highest since July. The yen has been stung by Japan's falling exports, which have driven the nation's trade deficit to a record high.

Here in the U.S., existing home sales showed a notable increase in the month of January, according to a report released by the National Association of Realtors on Wednesday, although the report also showed a significant downward revision to the data for December.

The report showed that existing home sales rose 4.3 percent to an annual rate of 4.57 million in January from a downwardly revised 4.38 million unit rate in December.

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