The U.S. dollar was higher against its major counterparts in European deals on Wednesday, as the U.S. core consumer inflation topped forecasts in February and housing starts strengthened, backing hopes for higher interest rates this year.
Data from the Labor Department showed that core consumer prices rose by 0.3 percent in February, matching the increase seen in the previous month. Core prices had been expected to edge up by 0.2 percent.
Meanwhile, the consumer price index dipped by 0.2 percent in February after coming in unchanged in January. Economists had expected prices to fall by 0.3 percent.
Data from the Commerce Department showed that new residential construction in the U.S. increased more than expected in the month of February.
The report said housing starts jumped 5.2 percent to an annual rate of 1.178 million in February from the revised January estimate of 1.120 million.
Economists had expected housing starts to climb 4.3 percent to a rate of 1.146 million from the 1.099 million originally reported for the previous month
Traders now look ahead to the Federal Reserve’s monetary policy announcement scheduled for this afternoon.
The Fed is widely expected to leave interest rates unchanged, but traders are likely to keep a close eye on the accompanying statement.
Fed Chair Janet Yellen’s subsequent press conference is also likely to attract attention and may shed additional light on the outlook for rates.
The currency has been trading higher against most major rivals in Asian deals, as awaited for fresh guidance from the Federal Reserve on interest rates, after recent spate of encouraging U.S. data.
The greenback climbed to 1.1075 against the euro, compared to 1.1109 hit late New York Tuesday. The next possible resistance for the greenback is seen around the 1.09 area.
Figures from Eurostat showed Eurozone construction output increased at the fastest pace in nearly four years in January, after falling in the previous month.
Construction output climbed a seasonally adjusted 3.6 percent month-over-month in January, in contrast to a 0.7 percent fall in the previous month, which was revised from a 0.6 percent drop reported earlier.
The greenback appreciated to 113.79 against the Japanese yen, up by 0.59 percent from Tuesday’s closing value of 113.12. If the greenback extends rise, 115.00 is possibly seen as the next resistance level.
The Bank of Japan does have the scope to lower rates further, Governor Haruhiko Kuroda said.
Speaking to lawmakers, the central bank chief said there was room to lower interest rates further.
The greenback spiked up to 1.4059 against the pound, its highest since March 3. On the upside, it may locate resistance around the 1.39 zone.
Data from the Office for National Statistics showed that the U.K. unemployment rate remained unchanged at a 10-year low during November to January period.
The jobless rate came in at 5.1 percent in three months to January, unchanged from the fourth quarter of 2015. The rate also matched economists’ expectations.
The greenback rose back against the franc with the pair trading at 0.9897, after reaching a 6-day high of 0.9901 at 4:00 am ET. Continuation of the greenback’s uptrend may lead it to a resistance around the 1.02 mark.
The greenback strengthened to a new 2-week high of 0.6575 against the kiwi, 1-week highs of 1.3405 against the loonie and 0.7415 against the aussie, compared to yesterday’s closing quotes of 0.6598, 1.3355 and 0.7456, respectively. The greenback is seen finding resistance around 1.36 against the loonie, 0.73 against the aussie and 0.645 against the kiwi.
The material has been provided by InstaForex Company – www.instaforex.com