U.S. Dollar Declines After Sharp Plunge In Housing Starts
April 18 2017 - 6:28AM
RTTF2
The U.S. dollar declined against its major counterparts in the
early New York session on Tuesday, as U.S. housing starts plunged
more than expected in March, adding to recent run of disappointing
data that indicates a slowdown in economy.
Data from the Commerce Department showed that the housing starts
plunged by 6.8 percent to an annual rate of 1.215 million in March
from an upwardly revised 1.303 million in February.
Economists had expected housing starts to drop by 2 percent to a
rate of 1.262 million from the 1.288 million originally reported
for the previous month.
The U.S. treasury yields also declined, with the benchmark yield
on 10-year note falling 2.21 percent, while that of 2-year
equivalent was down by 1.18 percent. Yields move inversely to bond
prices.
Meanwhile, the Commerce Department said building permits, an
indicator of future housing demand, jumped by 3.6 percent to a rate
of 1.260 million in March from a revised 1.216 million in
February.
Building permits had been expected to climb by 3.1 percent to a
rate of 1.250 million from the 1.213 million that had been reported
for the previous month.
Investors also focus on economic dialogue between the U.S. and
Japan aimed to boost bilateral trade agreement, after the Trump
administration scraped the 12-nation Trans-Pacific Partnership
trade pact as part of protectionist policy.
The U.S. Vice-President Mike Pence is in Japan to negotiate free
trade agreement that would result in opening doors for U.S. goods
in Japanese markets.
The currency has been trading in a negative territory in the
European session.
The greenback declined to 0.9989 against the Swiss franc, a
level unseen since March 30. The next possible support for the
greenback-franc pair is seen around the 0.985 region.
The greenback fell to near a 3-week low of 1.0700 against the
euro, from a high of 1.0637 hit at 8:00 pm ET. Continuation of the
greenback's downtrend may see it challenging support around the
1.08 mark.
The International Monetary Fund Managing Director Christine
Lagarde said that France's presidential election is adding to the
existing political uncertainty worldwide as it raises several
questions on the future of the euro area.
There is an uncertainty and growing concern about the outcome of
the French election, Lagarde said in an interview to a group of
European reporters.
The greenback retreated to 108.65 against the Japanese yen, from
a 4-day high of 109.22 set at 8:00 pm ET. The greenback is seen
finding support around the 106.00 level.
S&P Global Ratings maintained the sovereign rating of Japan
at 'A+' with 'stable' outlook.
The rating agency said the economy's strong external position,
prosperous and diversified economy, political stability, and stable
financial system balance its very weak public finances.
The greenback dropped to a 4-1/2-month low of 1.2757 against the
Sterling, off its early 4-day high of 1.2515. Further weakness may
take the greenback to a support around the 1.30 area.
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