Investing.com - The dollar was flat against its rivals Wednesday as data showed a rebound in U.S. housing activity ahead of a widely expected interest rate hike.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.01% to 93.74.
The Commerce Department said Monday new home sales rose 3.5% to a seasonally adjusted annual rate of 629,000 units last month.
The larger-than-expected rebound came as new home sales in the Northeast increased by 47.8% to a rate of 34,000 in August after plunging by 46.5% to a rate of 23,000 in July.
The housing data arrived ahead of the Federal Reserve's decision on interest rates and the central bank's release of its projection for inflation, forecasts of future rates and unemployment.
As the Fed's decision draws closer, the debate continues as to whether the Federal Reserve will continue to describe its monetary policy as "accommodative." Monetary policy hawks, meanwhile, will likely parse the Fed data for any indication for steeper rate hikes in the coming years.
"Strong growth and higher yields in the U.S. are likely to continue supporting broad-based dollar," Rabobank said.
The euro and sterling were largely flat, helping the dollar hold onto its slender gains.
GBP/USD rose 0.03% to $1.3184, EUR/USD fell 0.05% to $1.1761.
It's unwise to trade sterling right now unless it's essential to do so, warned Jeremy Cook, chief economist at WorldFirst, citing an uncertainty outlook for currency due to Brexit.
Elsewhere, USD/CAD rose 0.27% to C$1.2987, benefiting from falling oil prices, which hurts the loonie, and the lack of progress from U.S.-talks concerning the North American Free Trade Agreement front.
USD/JPY fell 0.05% to Y112.92.