The U.S. dollar extended its early rally against the Japanese yen in New York deals on Tuesday, after housing starts topped forecasts in September, and investors await speech by the Federal Reserve Chair Janet Yellen to ascertain whether the central bank will raise rates this year.
The report released by the Commerce Department showed that U.S. housing starts rose more-than-expected in the month of September.
The report said housing starts climbed 6.5 percent to an annual rate of 1.206 million in September from the revised August estimate of 1.132 million. Economists had expected housing starts to rise to a rate of 1.147 million.
The bigger than expected increase in housing starts reflected a jump in multi-family starts, which surged up 18.3 percent to a rate of 466,000 in September from 394,000 in August.
Yellen speaks at the Labor Hall of Honor Induction Ceremony, in Washington DC at 11:00 am ET. Her speech will be closely watched for more indications about the timing of Fed’s rate lift-off.
While speaking on Bloomberg Television with Michael McKee on Monday, the Federal Reserve Bank of San Francisco President John Williams said that he expects the unemployment rate to dip below 5.0 percent and the inflation to stablize, allowing policy makers to act “in the near future.”
He added that a decision on a rate hike would be “a close call.”
The currency was trading lower against the franc, euro and the pound in the European session. Against the yen, the currency trended higher.
In early New York trading, the greenback recovered to 0.9534 against the Swiss franc and 1.1346 against the euro, from its early 5-day low of 0.9494 and a 4-day low of 1.1387, respectively. If the greenback extends rise, it may challenge resistance around 0.97 against the franc and 1.115 against the euro.
Extending early gains, the greenback advanced to a weekly high of 119.81 against the Japanese yen, from its early low of 119.41. The greenback-yen pair is seen finding resistance around the 120.5 region.
The greenback, having fallen to a 5-day low of 1.5506 against the pound at 3:00 am ET, reversed direction with the pair trading around 1.5472. The pair finished Monday’s trading at 1.5461.
The material has been provided by InstaForex Company – www.instaforex.com