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Dollar index pushes lower after mixed U.S. housing data

Published 01/21/2015, 08:40 AM
© Reuters.  Dollar extends losses vs. counterparts as U.S. data weighs
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Investing.com - The dollar pushed lower against the other major currencies on Wednesday, after the release of mixed U.S. housing reports, although the greenback still continued to trade within close distance of recent 12-year highs.

In a report, the U.S. Commerce Department said that the number of building permits issued last month decreased by 1.9% to 1.032 million units from November’s total of 1.052 million.

Analysts expected building permits to rise by 1.3% to 1.055 million units in December.

The report also showed that U.S. housing starts rose by 4.4% last month to hit 1.089 million units from November’s total of 1.043 million units, compared to expectations for a reading of 1.040 million.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.61% to 92.79, still close to Friday's 12-year peak of 93.56.

EUR/USD climbed 0.48% to 1.1609, pulling away from Friday's 11-year lows of 1.1459.

Sentiment on the single currency remained vulnerable as investors waited to see if the European Central Bank would embark on an outright quantitative easing program on Thursday.

USD/JPY tumbled 1.30% to 117.29, pulling back from the previous session's one-week highs of 118.89 after the Bank of Japan held off on expanding its monetary easing scheme and instead expanded a loan scheme aimed at boosting lending.

The BOJ maintained the size of its stimulus program and reiterated its pledge to increase base money at an annual pace of ¥80 trillion through buying government bonds and risk assets.

The central bank also cut its core inflation forecast 1% from 1.7% three months ago.

Elsewhere, the pound edged lower against the dollar, with GBP/USD slipping 0.15% to 1.5119, re-approaching a recent 18-month trough of 1.5032.

Sterling shrugged off a report by the Office for National Statistics showing that the U.K. unemployment rate dipped to 5.8% in the three months to November from 6.0% in the previous three month-period and better than expectations for a reading of 5.9%.

The report also showed that the claimant count fell by 29,700 last month, compared to expectations for a decline of 25,000 people.

Separately, the minutes of the Bank of England's January policy meeting showed that members voted unanimously to keep the asset puschase facility program on hold.

Members also voted unanimously to keep interest rates unchanged at a record-low 0.5%. During the five previous months, board members Martin Weale and Ian McCafferty had consistently voted to raise interest rates to 0.75%.

Meanwhile, USD/CHF plummeted 1.55% to trade at 0.8615.

The commodity-linked currencies extended earlier gains. AUD/USD advanced 0.72% to 0.8228 and NZD/USD climbed 0.47% to 0.7676.

USD/CAD slid 0.36% to 1.2068, pulling away from Tuesday's more than five-and-a-half year highs of 1.2117 even as Statistics Canada reported that wholesale sales fell 0.3% in November, confounding expectations for a 0.2% rise, after an uptick of 0.1% in October.

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