* U.S. existing home sales, earnings boost optimism
* Euro hits 7-week high vs dollar, 3-week high vs yen
* Bank of Canada says Canadian recession ending
(Updates prices, adds quote, changes byline)
By Wanfeng Zhou
NEW YORK, July 23 (Reuters) - The dollar and euro rallied
against the yen on Thursday as upbeat U.S. corporate results
and housing data fueled optimism about the economy and dented
safe-haven demand for the Japanese currency.
A rally in U.S. stocks further stoked investors' appetite
for risk. The Dow industrials rose above 9,000 points soon
after the start of trading for the first time since January,
boosted by strong quarterly results from 3M Co <MMM.N> and
others.
"For today, the mood is absolutely cheery," said Dan Cook,
a senior market analyst at IG Markets in Chicago. "The story
has been yen weakness across the board as traders and investors
have been cheered by some pretty positive news."
U.S. existing home sales notched their third monthly rise
in June and prices hit their highest level since October,
fueling hopes that the housing sector is finally on the mend
and will help propel a broader economic recovery.
[].
The data suggests "that the ailing housing sector is
beginning to stabilize. That would be a necessary component for
a more meaningful U.S. recovery," said Joe Manimbo, a currency
trader at Travelex Global Business Payments in Washington.
"The data that we saw today, coupled with some of earnings
reports are increasing the momentum that we're likely to see a
recovery this year," he added.
In afternoon trading in New York, the euro rose to a
three-week high at 135.61 yen <EURJPY=R>, according to Reuters
data. It last traded at 135.34, up 1.8 percent.
The euro climbed to a high of $1.4291 <EUR=>, the strongest
level since early June, before paring gains to trade at
$1.4206, little changed on the day.
The dollar gained 1.8 percent to 95.25 yen <JPY=> after
hitting 95.29 yen, the highest in more than two weeks.
"All in all, the data will further encourage the positive
risk appetite tone," said Alan Ruskin, chief international
strategist at RBS Global Banking and Markets in Greenwich,
Connecticut.
"That equities finally look to be making headway into a new
price zone will further stir the risk positive trade."
Comments from the Bank of Canada that the country's
recession is ending this quarter also helped risk sentiment.
[].
The BoC comments propelled the Canadian dollar to its
highest since June 3 against the U.S. dollar, which last traded
down 1.2 percent at C$1.0866 <CAD=>.
(Additional reporting by Gertrude Chavez-Dreyfuss; Editing by
Kenneth Barry)
