OTTAWA (dpa-AFX) - The U.S. dollar turned in a fine performance against most of its major rivals on Tuesday, buoyed by news about President Donald Trump and congressional leaders clinching a two-year budget agreement.
The deal would help raise hundreds of billions in new spending and avert a government shutdown and fiscal crisis.
Soon after the leaders signed off on the final agreement on Monday evening through a conference call, Trump tweeted, 'I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy - on a two-year Budget and Debt Ceiling, with no poison pills.'
He wrote further that the deal was a real compromise in order to give another big victory to the country's Great Military and Vets.
The two-year debt and budget deal will enable the U.S. Treasury to ramp its short-term borrowing and build a cash pile, which had dropped down to around $195 billion in late April.
The greenback was also supported by the IMF's forecast that the U.S. economy will see a 2.6% growth this year. The IMF lowered its overall global growth outlook to 3.2% for the year.
Traders were also hoping that the Federal Reserve, scheduled to meet next week for its monetary policy review, will not cut interest rate by any steeper than the widely expected 25 basis points.
The dollar index, extending gains from previous sessions, moved past 97.70, gaining more than 0.45% for the day.
A somewhat disappointing existing homes sales data probably limited the greenback's upside.
Against the euro, the dollar strengthened to 1.1150, gaining more than 0.5% as traders bet on fresh stimulus from the European Central Bank on Thursday.
The pound sterling was down more than 0.3% with a unit fetching $1.2436, compared to $1.2476 late Monday.
British factory orders declined sharply in the three months to July as both domestic and export orders fell the most since the financial crisis and business optimism reached a 3-year low, hit by Brexit uncertainty and slow global growth, a closely-watched survey revealed Tuesday.
The Japanese yen slipped to 108.29 a dollar, giving the latter a 0.34% return over previous close.
Against the Aussie the dollar was up 0.45% with the AUD-USD pair hovering around 0.7005.
Against the loonie, the dollar gained 0.14% at 1.3138 and against Swiss franc, it was up 0.35%, at 0.9854.
According to a report released by the National Association of Realtors (NAR), existing home sales in the U.S. pulled back by much more than anticipated in the month of June, after seeing a notable increase in the previous month.
NAR said existing home sales tumbled by 1.7% to annual rate of 5.27 million in June after soaring by 2.9% to an upwardly revised rate of 5.36 million in May.
Economists had expected existing home sales to edge down by 0.2% to a rate of 5.33 million from the 5.34 million originally reported for the previous month.
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