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Dollar remains broadly lower after mixed U.S. housing data

Published 06/17/2016, 08:38 AM
© Reuters.  Dollar still lower vs. rivals after U.S. data paints mixed picture
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Investing.com - The dollar remained broadly lower against the other major currencies on Friday, after the release of mixed U.S. economic reports did little to boost optimism over the strength of the economy after a string of downbeat U.S. data on Thursday.

USD/JPY was steady at 104.23, still close to Thursday’s 22-month low of 103.55.

The U.S. Commerce Department said housing starts declined 0.3% to 1.164 million units last month from April’s total of 1.167 million units, a downward revision from the initial 1.172 million. Analysts had expected an decrease to 1.150 million in May.

Meanwhile, the number of building permits issued increased by 0.7% to 1.138 million units from 1.130 million. Economists had forecast a rise to 1.150 million units in May.

The data came a day after reports showed that the number of individuals filing for initial jobless benefits in the week ending June 11 rose more-than-expected, while U.S. consumer prices rose less than anticipated last month.

The yen had rallied against the dollar after Bank of Japan officials voted on Thursday to continue expanding the monetary base at an annual rate of about ¥80 billion.

At the conclusion of its monetary policy meeting on Thursday, the BoJ also flagged the EU referendum on June 23 as a key geopolitical threat to the Japanese economy, along with the “European debt problem”.

The decision came after the Fed also cited the referendum as a factor in its decision on Wednesday to keep interest rates on hold.

The dollar had already weakened against the other major currencies when the Fed kept rates unchanged and lowered forecasts for how much they expect to hike interest rates in the next few years.

EUR/USD rose 0.22% to 1.1251.

The dollar was lower against the pound and the Swiss franc, with GBP/USD up 0.58% at 1.4287 and with USD/CHF shedding 0.32% to 0.9620.

The Bank of England also chose on Thursday to maintain its current monetary policy and reiterated that the possibility of a Brexit was "the largest immediate risk facing U.K. financial markets, and possibly also global financial markets."

However, campaigning for the British referendum was halted late Thursday, after a pro-EU British lawmaker, Jo Cox, was shot to death while meeting with constituents.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.33% at 0.7386 and with NZD/USD adding 0.10% to 0.7052.

Elsewhere, USD/CAD dropped 0.57% to trade at 1.2890, off the previous session’s two-week high of 1.3085.

Statistics Canada reported on Friday said its consumer price index rose by 0.4% in May, disappointing expectations for a 0.5% gain. Year-on-year, consumer prices increased by 1.5% last month, below expectations for a 1.6% rise.

Core CPI, which excludes the eight most volatile items, rose 0.3% in May, in line with expectations.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.31% at 94.48.

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