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Dollar holds steady despite upbeat US economic data

The dollar held steady on Tuesday amid positive US economic data seen as not strong enough to push the Federal Reserve to advance the start of interest rate increases.

NEW YORK: The dollar held steady on Tuesday amid positive US economic data seen as not strong enough to push the Federal Reserve to advance the start of interest rate increases.

US consumer confidence rose in June to its highest level since January 2008 and new-home sales scored their strongest monthly gain in 22 years in May, hitting the highest pace since May 2008.

"At the start of the week we were sceptical about the ability of US data to drive the dollar higher and even though the greenback reacted positively to the latest economic reports, the ugly truth about the dollar rally is that it is not impressive at all," said Kathy Lien of BK Asset Management.

Trading volumes were thin. Lien noted the narrow trading range of the greenback against the yen and the euro.

"The data is just not good enough to push the Fed to tighten monetary policy early," she said.

The pound, meanwhile, lost ground from its rally last week on Bank of England chief Mark Carney's hints that the central bank could lift interest rates sooner than expected.

Carney made comments on Tuesday that were "nothing short of an effort to redact some of his hawkish tone," said Christopher Vecchio, currency analyst at DailyFX.

But Carney's comments did not necessarily set up a long-term pound-selling opportunity, he said.

"The GBP is one of the top performers this year and has hit fresh yearly highs against several of its major counterparts," he said, pointing to the dollar, euro and Swiss franc.

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