The US dollar climbed against a basket of other major currencies on Wednesday, following the release of strong housing data that improved the short term outlook. The greenback still remained near its weakest level since the third quarter of last year after suffering from sharp losses over the past two weeks.
In a joint report, the US Census Bureau and the US Department of Housing and Urban Development announced that building permits increased 7.4% to 1.254 million in June. The number, which is adjusted to an annual rate, followed a revised reading of 1.168 million in May and far exceeded estimates of a 3.0% gain.
The report also revealed that housing starts jumped 8.3% to 1.215 million last month from a revised reading of 1.122 million in the previous month. Economists had forecasted a 5.8% increase. Housing starts in the Northeast had a sharp recovery in June, which added to gains for the Midwest and West, and cancelled the negative pressure from a drop in the South.
The US housing market showed signs of weakness over the past 3 or 4 months, which raised concerns between builders. However, the latest data contributed to evidence showing that housing demand is still solid, which should support underlying growth trends.
Despite moving higher today, the US dollar remained under heavy weight due to increasing doubts about President Donald Trumpâs economic agenda. Recent efforts by Republicans to overhaul healthcare failed to yield any results. Republican lawmakers pulled the plug on the latest version of the Republican contentious bill that was meant to replace Obamacare.
EUR/USD traded at 1.1528 as of 14:00 GMT on Wednesday from 1.1517 at 08:10 GMT, the pairâs lowest level today. EUR/USD began the day at 1.1548. USD/JPY fell to 111.66 from 111.96 when trading started today. USD/JPY touched 111.56 at 13:40 GMT, a level last seen on June 27.
The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, rose to 94.73 as of 13:59 GMT today from 94.60 yesterday.
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