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The dollar strengthened on Tuesday local time, after reports U.S. home sales in November surged higher than expected despite the U.S. economic growth in the third quarter was revised down to 2.2 percent.

The European single currency was changing hands at 1.4241 dollars in late deals in London, down from 1.4281 dollars in New York late Monday.

Against the Japanese currency, the dollar rose to 91.68 yen from 91.15 yen on Monday, while the euro rose at 130.56 yen from 130.17 yen.

Dollar prompted by a report that existing home sales (existing homes) in the U.S. jumped 7.4 percent in November to its highest level since February 2007, shows the recovery in the sector at the epicenter of the global economic crisis.

National Association of Realtors said sales primarily due to first home buyers rush to take advantage of government tax credits, but indicated that this would lead to "a sustainable market itself in the second half of 2010."

Analysts said the data showed that the U.S. Federal Reserve may start cutting measures to support the U.S. economy and the move to raise interest rates from a record low in a step that would make the dollar more profitable.

Currency trading showed a positive correlation between U.S. economic news and a rise in riskier assets but generate higher as euro may now have been damaged and the dollar is no longer seen as the unit of "safe haven" major, they added.

"The test is whether the U.S. dollar continued to take advantage of the positive signals from the U.S. economy," said Daragh Maher from Calyon, the French bank.

Tim Hughes of financial firms IG Index spread betting, said: "With both, the dollar and Wall Street increased recently, there was a feeling that the global economy may be slowly re-calibrate."

"The movement into the holidays, many of which will reflect that the world suddenly looked bright, especially when compared with the gloom of a year ago," he added.

Euros are also punished by the debt crisis in Greece, which has raised fears about the solvency countries other euro zone and what would be the European Central Bank if one member defaults on debt.

Moody `s on Tuesday became the last of the three major international ranking this month's credit rating lowered the Greek government, which is struggling with debt problems are swollen and public protest.

However, the decline in ratings to A2 from A1 is lighter than feared and shares in Athens recovered. Moody `s say, Greece to face short-term liquidity risk" very limited "but it must overhaul public finances in the long run.

"We interpret this as a first step in our efforts to convince the market," said a finance ministry official, adding that more sharply downgrade would put the country "on a razor edge sebuh."

Latest downgrade is due to lawmakers debate the Greek 2010 budget, which according to the government aims to reduce the growth of public deficits and reduce solvency fears the country. A vote is expected on Wednesday.

Also hit investor confidence in markets was a report that U.S. economic growth in the third quarter was much worse than previously estimated - is set at 2.2 percent rather than 2.8 percent.

The report still insists that the world's largest economy swung back into growth in the period from July to September after a four-quarter contraction in the worst recession for decades.

While the British pound fell as official data showed that the British were still in recession.

National Statistics Office said that UK gross domestic product (GDP) contracted 0.2 percent during the third quarter compared with the previous three months.

Previous statistics put at 0.3 percent contraction, while the consensus projection of analysts this time demonstrate GDP shrinks 0.1 per cent only.

In London, the euro changed hands at 1.4241 dollars against 1.4281 dollars late Monday, 130.56 yen (130.17), 0.8928 pounds (0.8896) and 1.4935 Swiss francs (1.4938).

Dollar stood at 91.68 yen (91.15) and 1.0487 Swiss francs (1.0458). The pound was at 1.5951 dollars (1.6050).

On the London Bullion Market, gold prices fell to 1084 dollars per ounce from late Monday 1105.50 dollars. (*)

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