Falling oil prices helped raise the appeal of the US dollar despite a disappointing round of consumer confidence and housing data Tuesday. As a result, the low yielding Swiss franc and Yen posted the biggest loss against the US dollar, while the high yielding Australian and Canadian dollar weakened against the greenback on the same falling commodities prices. Against the European currencies, the greenback regained its footing against the British Pound and Euro as the pairs fell to 1.976 and 1.568, respectively. The New Zealand dollar, on the other hand, fought the trend with a surprise improvement in business confidence.

On the economic front, fresh housing data hampered the growth prospects for the US as the S&P/Case-Shiller Home Price Index plunged to a low of -14.4 percent (the worst reading in records going back more than 20 years) as rising foreclosures and mortgage costs depressing buyer demand and thereby prices. Furthering the dour mood of the economic calendar, the Conference Board’s version of the consumer confidence survey dropped more quickly than expected a new 16-year low of 57.2 – hardly a surprise considering the daily records in gasoline and bleak outlook for the world’s largest economy. However, despite these weak indicators, the dollar was still able to manage an advance for the day. Contributing to the pick up was the new home sales report fro the month of May. The leading housing report revealed a surprise 3.3 percent jump in purchases thanks to a considerable revision to the previous month’s reading.

The stock market was similarly strong with oil dropping below $129 a barrel, which in turn led investors to brush off the slew of negative economic data. As a result, the DJIA rose 68.72 points to 12,548.35 points, with IBM and Boeing picking up the biggest gains out of the big 30. Among the broader indices, the S&P500 picked up 9.42 points to hold off at 1,385.35 points, amid 135 stocks falling to a new 52 week low.

Rising stock prices swayed demands for US Treasuries, and led many investors to leave the safe haven of risk free bonds in search of higher returns. As a result, the benchmark 10-Year yield increased to 3.915percent from 3.844 percent, while the 2-Year yield surged to 2.505 percent from 2.438 percent.

Looking ahead, the MBA Mortgage Applications index will kick off the morning at 11:00 GMT, while the Durable Goods index due out at 12:30 GMT represents key event risk for the session with economists forecasting a 1.1 percent decline in bookings – a concerning sign that capital investment will waver along with the economy.

Antonio Sousa is a Currency Analyst for FXCM.