Investing.com - The dollar extended gains on Wednesday, rising to 11-month highs against a basket of other major currencies after upbeat U.S. housing data on Tuesday indicated that the recovery is gaining traction.
The euro fell to fresh nine-month lows, with EUR/USD slipping 0.12% to 1.3303.
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 was at four-and-a-half month lows, with GBP/USD at 1.6610.
Sterling fell sharply on Tuesday after a report showing that the annual rate of inflation in the U.K. slowed to 1.6% in July was seen as diminishing the likelihood that the Bank of England will raise rates this year.
The dollar advanced to four-and-a-half month highs against the yen, with USD/JPY rising 0.27% to 103.18, while USD/CHF eased up 0.09% to 0.9099.
The Australian and New Zealand dollars were also weaker, with AUD/USD slipping 0.13% to 0.9289 and NZD/USD down 0.21% to 0.8399.
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 edged up 0.07% to 1.0949.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.12% to 82.03, the highest level since September 6.