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Forex - Dollar index hits fresh 11-month highs on U.S. housing data

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Shutterstock photo - - The dollar rose to fresh 11-month highs against the other major currencies on Tuesday, as the release of upbeat U.S. housing data lent strong support to the greenback.

The U.S. Commerce Department said that the number of building permits issued last month jumped by 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, beating expectations for an increase of 8.6% to 969,000 units.

A separate report showed that U.S. consumer prices rose 0.1% last month, meeting estimates, after rising 0.3% in June.

Core consumer prices, which exclude food and energy costs, inched up by 0.1% last month, compared to expectations for a 0.2% gain. Core CPI rose 0.1% in June.

GBP/USD dropped 0.62% to 1.6625, the lowest level since April 8 after official data showed that the annual rate of inflation in the U.K. slowed to a two month low of 1.6% in July from 1.9% in June.

The slowdown in inflation prompted investors to push back expectations for a rate hike by the Bank of England, sending sterling lower across the board.

Elsewhere, EUR/USD fell 0.26% to a fresh nine-month low of 1.3320.

The euro remained under pressure after poor economic growth data last week added to pressure on the European Central Bank to implement fresh measures to shore up the faltering recovery in the region.

The dollar edged higher against the yen, with USD/JPY adding 0.17% to 102.74, while USD/CHF rose 0.15% to 0.9080.

Market sentiment was supported by hopes that talks between Russia and Ukraine would result in a breakthrough to ease geopolitical tensions in the region.

The New Zealand dollar was lower, with NZD/USD down 0.25% to 0.8455 after weak inflation reports on Tuesday indicated that the Reserve Bank is likely to keep rates on hold following recent rate hikes.

AUD/USD edged up 0.11% to 0.9334 and USD/CAD added 0.21% to trade at 1.0910.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.28% to 81.85, the highest since September 2013. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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