US Dollar Mixed on Housing Data, Fed Testimony

The US dollar is mixed on Tuesday as housing data and congressional testimony from the central bank head weigh on the greenback. The buck’s short-term performance will rely heavily on the wave of data coming through the pipe this week – at home and abroad.

According to the US Census Bureau, construction on new houses tumbled 11% in December to an annual rate of 1.08 million, a two-year low. The market had penciled in housing starts to reach 1.23 million to finish off the year. But the data reveals that a rebound may be near as permits to construct additional houses rose 0.3% to an annual pace of 1.33 million.
Moreover, underneath the surface revealed that housing construction was flat in the northeast and it fell sharply in the rest of the country. The biggest drops were found in multi-dwelling projects of two or more units, which accounted for a 20% decline in December, compared to a 6.7% slide for single-family homes.
In other housing data, the S&P CoreLogic Case-Shiller US National Home Price Index, a measurement of home-price appreciation, was 4.7% in December, down from 5.1% in November. This is the slowest pace since August 2015.
Meanwhile, consumer confidence rose the first time in four months in February. The Conference Board’s consumer confidence index jumped to 131.4, up from 121.7 in January. The median estimates were 124.7.
Another key factor driving the market on Tuesday is Federal Reserve Chair Jerome Powell’s testimony to the Senate Banking Committee. He told lawmakers that some pieces of economic data have softened in recent months, leaving the Eccles Building to take a break from additional moves on interest rates.
He did note that the labor market “remains strong” and that wage growth is still strong, something that is encouraging Federal Open Market Committee (FOMC) members to want to pull the trigger on additional rate hikes. The Fed raised rates four times last year.
The USD/CAD currency pair rose 0.03% to 1.3192, from an opening of 1.3189, at 18:13 GMT on Tuesday. The EUR/USD surged 0.2% to 1.1387, from an opening of 1.1357.

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