* Dollar down after recent rally as traders book profits
* Euro rises above $1.44 but on pace for big monthly fall
* U.S. durable goods orders rise; jobless claims fall
(Updates prices, adds quotes, changes byline, changes
dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, Dec 24 (Reuters) - The dollar fell against the
euro on Thursday, extending losses after weak U.S. housing data
the previous day, as investors sought to lock in gains on the
greenback's recent rally.
The dollar's losses were limited after data showing a rise
in U.S. durable goods orders for November and a drop in initial
jobless claims in the latest week rekindled optimism about the
prospects for a recovery. For details, see []
[].
Trade was extremely thin in Europe and the United States
ahead of Friday's Christmas holiday, and traders were wary of
reading too much into current price movements.
"We moved in very much of a straight-line fashion with the
dollar higher and euro lower for the last three weeks," said
Brian Dolan, chief currency strategist at Forex.com in
Bedminster, New Jersey. "We're long overdue for a correction."
The data "is all pretty solid and continues the trend of
data signifying improvement in the U.S. economy. The trend
lately has been for the dollar to respond more directly to
positive numbers," he added.
Figures on Wednesday showed sales of U.S. new homes
unexpectedly fell to their lowest level in seven months in
November [], pushing the dollar down and lifting the euro, yen and other major currencies off multi-week lows.
"This year has been totally dominated by the ebb and flow
of risk appetite, but over the last month or so we have started
to see the dollar's fortunes returning to more normal drivers,
like its own economic data," said Richard Wilshire, FX Broker
at ETX Capital.
In early trading, the euro <EUR=> rose 0.4 percent to
$1.4376, after climbing to a session peak of $1.4418, according
to Reuters data.
The single euro zone currency dipped near $1.42 this week,
dented by concerns about sovereign ratings after a third
ratings downgrade on Greece's debt. The euro's fall in recent
days left it down 4.2 percent against the dollar so far this
month and on course for its biggest monthly fall since
January.
The dollar slipped 0.1 percent to 91.57 yen <JPY=> after
touching a two-month high of 91.87 yen this week, according to
Reuters data. Japanese markets will be open on Friday when
London and New York are shut.
Traders said options expiries in dollar/yen later Thursday
at 90.50, 91.00 and 91.50 yen may rein in moves in the pair.
The ICE Futures U.S. dollar index <.DXY>, a gauge of the
greenback against six other major currencies, was down 0.2
percent 77.762, not far from this week's three-month high of
78.449.
The dollar remained close to recent highs, but some
analysts said charts showed momentum for the dollar's move up
against the euro and yen -- aided by year-end closing of short
positions against the greenback -- may be tailing off.
"I think the adjustment of the dollar and the U.S. yield is
probably near the end," said Tohru Sasaki, chief FX strategist
Japan at JP Morgan Securities in Tokyo.
(Additional reporting by Jessica Mortimer in London; Editing
by Padraic Cassidy)
