Dollar climbs on US home sales data

Dollar climbs on US home sales data

TOKYO - The dollar jumped back above 120 yen on Thursday following a strong increase in US existing home sales, while traders keep a wary eye on Greece's long-running bailout talks.

In Tokyo, the greenback bought 120.05 yen, up from 119.89 yen in New York and 119.54 yen in Tokyo earlier Wednesday.

The euro weakened to $1.0700 and 128.38 yen from $1.0725 and 128.58 yen in US trade.

On Wednesday, the National Association of Realtors said US existing-home sales rebounded in March to the fastest pace in 18 months, pointing to solid spring sales this year -- reviving speculation about a Federal Reserve interest rate rise.

The expected hike underlines the divergence between US monetary policy and many of its overseas counterparts, including in the eurozone and Japan, which are embarking on a programme of stimulus.

"The dollar got a push higher from firm housing data," Masato Yanagiya, head of foreign exchange and money trading at Sumitomo Mitsui Banking Corp, told Bloomberg News.

"Whether the dollar advances further hinges on Greece's situation, which is keeping investors from fully taking on risk."

The euro is slowly heading lower as Greece battles to raise cash to service its debts, while also haggling with creditors over reforms to its bailout.

With eurozone finance ministers due to meet in Latvia's capital Riga at the end of the week, analysts warn Athens may have only weeks left before defaulting and possibly exiting the eurozone unless it reaches a deal to unlock 7.2 billion euros in remaining bailout loans.

Investors were also keeping an eye on China, where manufacturing activity fell to a 12-month low in April, according to banking giant HSBC.

In other trading, the pound stayed above the $1.50 mark ahead of British elections in just over two weeks, with polls deadlocked.

Sterling traded at $1.5020 in Tokyo, down from $1.5040 in New York but still up from $1.4931 late Tuesday.

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