Dollar Inches Higher as Housing Starts Rebound
The dollar rose against its rivals Tuesday after U.S. housing starts rebounded in October, but analysts warned the housing market remained challenged.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.65% to 96.69.
Housing starts rose 1.5% to a seasonally adjusted annual rate of 1.228 million in October, the Commerce Department said Tuesday.
The report also highlighted a sharp 0.6% decline in building permits to a rate of 1.263 million units, beating economists' estimates.
The rebound in housing starts from a decline in the previous month did little to convince analysts that weakness in the housing market was starting to bottom, as they warned that the weaker outlook on building permits would weigh on activity.
The soft trajectory seen for building permits lately suggests that homebuilding likely doesn't have much further room to run, but "rising wages should continue to support demand in the near term, with higher home prices supporting homebuilding," CIBC said in a note.
The rout on Wall Street, meanwhile, also attracted demand for the greenback, which dropped to a two-week low amid cautious comments from Federal Reserve officials overnight.
EUR/USD fell 0.76% to $1.366 pressured by a slide in European equities amid a selloff in Italian bank shares and bonds as investors fretted about the ongoing rift between lawmakers in Brussels and Italy concerning the country's budget plans.
GBP/USD fell 0.61% to $1.2774 as Prime Minister Theresa May travelled to Brussels for more Brexit talks.
USD/CAD, meanwhile, rose 0.93% to C$1.3293 as a slump in oil prices weighed on the loonie, boosting the pair. While, USD/JPY fell 0.20% to Y112.78.