U.S. dollar gains on upbeat housing data, hope for Ukraine resolution

The U.S. dollar edged higher against most major currencies on Monday, boosted by strong data out of the U.S. housing market and on bright hopes that diplomatic efforts will find an end to the Ukraine conflict.

Waning geopolitical concerns in Eastern Europe supported the greenback on Monday. Russian and Ukraine foreign ministers held talks earlier, and while no resolution to end the conflict emerged, the flow of humanitarian aid deliveries into Ukraine from Russia continued, which calmed nerves in global markets.

On Friday, news that Ukrainian troops destroyed a portion of a Russian column of armored vehicles inside Ukraine rattled nerves across the globe, which pushed the greenback into negative territory.

Elsewhere, upbeat U.S. data boosted the greenback by keeping expectations firm that the Federal Reserve remains on track to end its stimulus bond-buying program around October and raise interest rates some time in 2015.

The National Association of Home Builders/Wells Fargo Housing Market Index increased to 55.0 in August, a seven-month high, from 53.0 in July, beating estimates for a reading of 53.0. A level above 50.0 indicates a favorable outlook on home sales and below indicates a negative outlook.

The dollar was up against the yen, with USD/JPY up 0.23% at 102.547, and up against the Swiss franc, with USD/CHF up 0.53% at 0.90647.

The euro, meanwhile, continued to come under pressure due to ongoing expectations that monetary stimulus programs in the U.S. will wind down at the same time the European Central Bank takes steps to loosen policy.

As of 16:27 ET on Monday, EUR/USD was down 0.27% at 1.33607.

The pound strengthened broadly after Bank of England Governor Mark Carney said over the weekend that interest rates could rise before wage growth picks up.

In a newspaper interview published on Sunday, Carney said that the bank did not have to wait for wage growth to recover before raising interest rates, shifting away from comments last week indicating the opposite.

Last week, the pound slumped after the Bank of England cut its forecast for wage growth to 1.25% from 2.5% in 2014, before picking up to 3.25% in 2015.

The greenback was down against the pound, with GBP/USD up 0.23% at 1.67262.