Expectations that the US housing market may be showing signs of an upturn have seen the dollar trade at a one week high against the euro.

This morning the dollar was at 1.3274 against the euro and at 1.9609 against the pound sterling.

There are expectations in the US that the Federal Reserve may up interest rates after data from the National Association of Realtors revealed sales of previously owned homes increased by the most in three years.

"The dollar is buoyed by expectations that the housing market might have turned the corner and the situation in Iran," Simon Derrick, chief currency strategist at Bank of New York in London, told Bloomberg.

Many eyes will be looking forward to Wednesday when Federal Reserve chairman Ben Bernanke addresses the Joint Economic Committee.

His comments on the condition of the subprime mortgage market, inflation and economic growth will all be keenly studied.