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Dollar gains on housing data, soft sentiment report weighs

Published 05/16/2014, 02:52 PM
Updated 05/16/2014, 02:54 PM
Dollar gains as data point to a more bustling U.S. housing sector

Investing.com - The dollar traded largely higher against most major currencies on Friday after data revealed a growing U.S. housing sector, though soft consumer sentiment numbers capped the greenback's advance.

In U.S. trading on Friday, EUR/USD was down 0.10% at 1.3698.

The Census Bureau reported earlier that U.S. building permits rose 8% to 1.080 million units last month, up from an upwardly revised 1.000 million in March. Analysts were expecting building permits to rise to 1.010 million units in April, and the better-than-expected figure gave the greenback support.

The report also showed that housing starts rose to 1.072 million units in April, from 947,000 in March, whose figure was revised up from a previously estimated 946,000. Analysts had expected building starts to rise to 980,000 units last month.

Soft consumer sentiment data watered down the greenback.

The preliminary Thomson Reuters/University of Michigan consumer sentiment index fell to 81.8 in May from 84.1 in April, confounding market expectations for a 84.5 reading, which softened the dollar.

Meanwhile, the single currency continued to come under pressure after data released on Thursday revealed that the euro zone’s gross domestic product grew just 0.2% in the first quarter, missing expectations for a 0.4% growth rate. On a year-over-year basis the bloc’s economy expanded 0.9%, falling short of expectations for growth of 1.1%.

A separate report showed that the bloc's annual rate of inflation was unchanged at 0.7% in April, in line with forecasts, but still well below the ECB's target of close to but just under 2%.

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Elsewhere, investors continued to track developments in Ukraine, as U.S. Secretary of State John Kerry warned Russia it faced broader economic and sector-related sanctions if it meddled in Ukraine's presidential elections on May 25.

The dollar was down against the yen, with USD/JPY down 0.07% at 101.50 and up against the Swiss franc, with USD/CHF up 0.10% at 0.8918.

The greenback was down against the pound, with GBP/USD up 0.18% at 1.6820.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.16% at 1.0866, AUD/USD up 0.10% at 0.9365 and NZD/USD down 0.12% at 0.8634.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.02% at 80.11.

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