U.S. Dollar Drops After Weak Housing Starts Data
June 16 2017 - 5:25AM
RTTF2
The U.S. dollar fell against its major counterparts in the
European session on Friday, as U.S. housing starts unexpectedly
fell sharply in May, eroding optimism over performance of the
housing industry in the second quarter.
Data from the Commerce Department showed that the housing starts
slumped by 5.5 percent to an annual rate of 1.092 million in May
from the revised April estimate of 1.156 million.
The significant decline surprised economists, who had expected
housing starts to climb to a rate of 1.215 million from the 1.172
million originally reported for the previous month.
The Commerce Department said building permits also tumbled by
4.9 percent to a rate of 1.168 million in May from a revised 1.228
million in April.
Building permits, an indicator of future housing demand, had
been expected to rise to a rate of 1.250 million from the 1.229
million that had been reported for the previous month.
Investors await the University of Michigan's preliminary report
on consumer sentiment in the month of June. The consumer sentiment
index is expected to be unchanged at 97.1.
The greenback was higher against its most major rivals in the
Asian session, as treasury yields rose in the wake of strong US
economic data released on Thursday.
The greenback remained lower at 1.1171 against the euro, off its
early high of 1.1138. The next possible support for the greenback
is seen around the 1.13 region.
Data from Eurostat showed that Eurozone inflation slowed as
estimated in May, largely reflecting the slowdown in energy price
growth.
The greenback fell to a session's low of 1.2796 against the
pound, after having advanced to 1.2751 at 5:15 pm ET. The greenback
is likely to challenge support around the 1.29 area.
Reversing from an early 2-week high of 111.42 against the
Japanese yen, the greenback eased to 111.10. On the downside,
110.00 is likely seen as the next support level for the
greenback-yen pair.
The Bank of Japan kept its monetary stimulus unchanged as widely
expected.
Governor Haruhiko Kuroda and his board members decided by an 7-2
majority vote to hold its target of raising the amount of
outstanding JGB holdings at an annual pace of about JPY 80
trillion.
The greenback pared its early gains against the Swiss franc with
the pair trading at 0.9744. This may be compared to a high of
0.9757 hit at 1:30 am ET. The greenback is seen finding support
around the 0.95 level.
The greenback slipped to 0.7244 against the kiwi and 0.7616
against the aussie, off its early highs of 0.7194 and 0.7576,
respectively. Continuation of the greenback's downtrend may see it
challenging support around 0.73 against the kiwi and 0.78 against
the aussie.
The greenback dropped to a 2-day low of 1.3222 against the
loonie, and held steady thereafter. The pair finished Thursday's
trading at 1.3268.
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