Dollar rallies in New York

The US dollar bounced from three-week lows against the euro on Tuesday on strong US economic data, and more gains are seen likely given the heavy sales of eurozone bonds anticipated this year. Data showed new orders received by US factories rose in November and orders, excluding transportation, recorded their largest gain in eight months.
In late afternoon trading, the dollar climbed 0.4 percent against the yen to 82.00 and gained 1.55 percent against the Swiss franc to 0.9483. Traders also said the lapse of the New York expiry in euro/dollar, where there are reportedly option-related bids in the $1.3400 region, contributed to the euro's retreat. Those vanilla bids in the euro had kept the euro partly supported throughout the Asian and London session.
The euro was down 0.4 percent against the dollar from late on Monday at $1.3307 after hitting three-week peaks at $1.3435. More support lies at $1.3280 and $1.3250, Monday's lows, traders said. A fall below key support at $1.3250 could prompt more selling in the euro as traders target the 200-day moving average just below $1.3100.
A drop in crude oil prices caused the dollar to outperform commodity-sensitive currencies. The greenback rose to a session peak of 1.0033 Canadian dollars, according to Reuters data. It was last at 0.9985 Canadian dollars, up about 0.5 percent on the day.
Meanwhile, minutes of the Federal Open Market Committee's December 14 meeting showed officials still felt the US recovery was weak enough to warrant monetary support. Portugal, Spain and Italy each face a formidable refinancing calendar in 2011, with a total above 500 billion euros scheduled to be rolled during the year, said Jay H. Bryson, global economist at Wells Fargo Securities in Charlotte, North Carolina.
Against the yen, the euro was 0.06 percent lower on the day at 109.05. In the next two months an estimated 150-200 billion euros of government bonds are scheduled to be issued by eurozone countries, some of which are struggling with rising budget deficits and higher borrowing costs.
The Australian dollar fell as severe floods in north-eastern Australia are expected to hurt coal production, a major contributor to the economy. The Aussie dollar fell 1.1 percent to US $1.0050, retreating from a 28-year peak around US $1.0257 set on Friday.