Investing.com - Robust data out of the U.S. housing sector
coupled with solid inflation numbers bolstered the dollar on
Tuesday, sending the euro to near 10-month lows against the
In U.S. trading, EUR/USD was down 0.34% at 1.3318, up from a
session low of 1.3314 and off a high of 1.3364.
The pair was likely to find support at 1.3298, the low from Nov.
7, 2013, and resistance at 1.3412, Friday's high.
The dollar firmed against the euro and most other currencies
after the U.S. Commerce Department said that the number of building
permits issued in July jumped 8.1% to 1.052 million units from
June's total of 973,000. Analysts expected building permits to rise
by 2.5% to 1.0 million units in July.
The report also showed that U.S. housing starts soared by 15.7%
last month to hit 1.093 million units from June's total of 945,000,
far past expectations for an increase of 8.6% to 969,000 units.
A separate report showed that the U.S. consumer price index rose
0.1% last month from June and 2.0% on year, both figures meeting
Core consumer prices, which exclude food and energy costs,
inched up by 0.1% last month, missing expectations for a 0.2% gain,
though the year-on-year rate came in at 1.9%, which met
On Monday, the National Association of Home Builders/Wells Fargo
Housing Market Index increased to 55.0 in August, a seven-month
high, from 53.0 in July, beating estimates for a reading of
The data fueled market speculation that the Federal Reserve will
close its asset-purchasing stimulus program in October and hike
interest rates some time in 2015.
Waning fears that the Russian-Ukraine conflict will escalate
also bolstered the greenback.
The euro, meanwhile, continued to come under pressure due to
ongoing expectations that monetary stimulus programs in the U.S.
will wind down at the same time the European Central Bank takes
steps to loosen policy.
Elsewhere, the euro was up against the pound, with EUR/GBP up
0.31% at 0.8014, and down against the yen, with EUR/JPY down 0.08%
The pound weakened broadly earlier Tuesday after official data
showed that the annual rate of inflation in the U.K. slowed sharply
in July, curbing expectations for an interest rate increase.
The annual rate of inflation slowed to a two-month low of 1.6%
in July from 1.9% in June. Economists had expected inflation to
tick down to 1.8%. U.K. consumer prices fell by a larger than
expected 0.3% in July.
The weak data was seen as diminishing the likelihood that the
Bank of England will raise rates this year after it halved its
forecast for pay growth in 2014 last week.
On Wednesday, the Federal Reserve is to publish the minutes of
its latest policy meeting.
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