2010.07.1916:43:00UTC+00Dollar Pauses Versus Euro As Homebuilder Confidence Dwindles

The dollar fell no further versus the euro on Monday, but failed to make up much ground after another troubling look at the housing sector.

In pausing following last week's steep losses, the dollar remained near its lowest in more than two months versus the euro and sterling.

Homebuilder confidence has deteriorated by more than anticipated in July, reflecting concerns about the housing market following the expiration of the homebuyer tax credit.

The National Association of Home Builders said its NAHB/Wells Fargo Housing Market Index fell to 14 in July from a downwardly revised 16 in June. Economists had expected the index to edge down to 16 from the 17 originally reported for the previous month.

It was the latest in a line of disappointing economic news that has raised concerns about the pace of the US recovery.

A report on housing starts, which refer to the number of privately-owned new homes on which construction has been started over some period, and building permits, which are the number of permits issued for new housing units each month, is slated to be released at 8:30 AM ET.

The buck traded near 1.2950 versus the euro for most of the day, having touched 1.3006 on Friday.

Against the sterling, the dollar improved slightly to 1.5240. A week ago, the dollar fell to 1.5471.

The dollar fetched Y86.80 versus the yen after slipping to a 2010 low of 86.25 late last week.

Moody's Investor Services downgraded the credit rating of Ireland from Aa2 to Aa1, citing significant loss of financial strength as the primary reason. The outlook was downgraded from 'stable' to 'negative.'

Eurozone construction output continued to decline in May.

The construction output dropped a seasonally adjusted 1% on a monthly basis in May, compared to a 0.3% fall in the previous month, a report by the Eurostat showed on Monday.

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