Forex - Dollar dives after slump in US pending home sales index

LONDON (Thomson Financial) - The dollar fell sharply after figures showed disruption in the US mortgage market pushed pending home sales in July down to their lowest level in almost six years. The NAR's index of pending home sales fell 12.2 pct in July to 89.9 from 102.4 in June. The index was 16.1 pct lower than in July of last year and at its lowest since September 2001 when it was 89.8. Analysts had expected a much more moderate fall of 2 pct, and the figures are likely to fuel concerns about a deteriorating US housing market, which has been one of the main causes of the recent market turbulence. The figures have also led to a dip in risk appetite, causing the yen to firm as investors shy away from the risky carry trade strategy of selling low yielding currencies to invest in high yielding ones elsewhere. At 3.16 pm BST the euro was trading at 1.3642 usd, having been at 1.3589 shortly before the figures were released, while against the yen the dollar slipped to 115.15 yen from 115.66. [size=1][color=silver][email][email protected][/email] rar/gp COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. [/color][/size]