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Forex - Dollar remains broadly supported on U.S. optimism

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Shutterstock photo - - The dollar remained supported against the other major currencies on Wednesday, hovering close to 11-month highs as Tuesday's upbeat U.S. housing data indicated that the recovery is gaining traction.

The euro fell to fresh nine-month lows, with EUR/USD shedding 0.26% to 1.3286.

The dollar strengthened across that board after data on Tuesday showed that U.S. housing starts jumped 15.7% in July, while the number of new permits granted to home-builders also accelerated, pointing to underlying strength in the housing sector.

The data offset a report showing that U.S. consumer prices rose just 0.1% in July.

The pound eased off four-and-a-half month lows, with GBP/USD adding 0.19% to 1.6648 after the minutes of the Bank of England's August policy meeting showed that two members voted in favor of a rate hike.

BoE bard members Martin Weale and Ian McCafferty said economic circumstances "were sufficient to justify an immediate rise in bank rate."

The remaining seven members voted to keep the rate on hold, saying early tightening could leave the economy "vulnerable to shocks", according to the report.

Separately, the Confederation of British Industry said that its index of industrial orders expectations climbed to 11 this month, from a reading of 2 in July, exceeding expectations for a rise to 4.

The dollar reached four-and-a-half month highs against the yen, with USD/JPY rising 0.34% to 103.26, while USD/CHF edged up 0.20% to 0.9111.

The Australian and New Zealand dollars were also weaker, with AUD/USD easing 0.08% to 0.9295 and NZD/USD down 0.30% to 0.8392.

Earlier Wednesday, Reserve Bank of Australia Governor Glenn Stevens said market have "underappreciated" the risk of a weaker Australian dollar, adding that it would be surprising based on economic fundamentals if the currency maintained current levels.

Elsewhere, USD/CAD trimmed gains to hold steady at 1.0945 after Statistics Canada reported that wholesale sales rose 0.6% to C$53.0 billion in June. Economists had forecast an increase of 1.3%.

Wholesale sales for May were revised up to 2.3% from a previously reported gain of 2.2%.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.20% to 82.11, the highest level since September 6. 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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