Investing.com – The dollar traded higher against a basket of global currencies on Wednesday, buoyed by upbeat housing data indicating a turnaround in the sluggish pace of U.S. home building.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.14% to 94.58.
U.S. homebuilding in June topped analysts’ expectations, after declining for three straight months, as both single-family and multi-family construction increased, offsetting the recent raft of economic reports pointing to possible weakness in the economy.
Housing starts jumped 8.3 percent to a seasonally adjusted annual rate of 1.22 million units, the highest level since February, the Commerce Department said on Wednesday.
Economists had forecast activity rising to a rate of 5.8%.
The better-than-expected economic data helped the greenback recover recent losses against the euro.
EUR/USD fell 0.29% to $1.1521, as traders look ahead to the European Central Bank (ECB) meeting Thursday amid expectations that the central bank would avoid elaborating on its plans to taper its asset-purchase program.
Investors will also have to contend with an interest rate decision from the ECB, with the majority of analysts expecting an unchanged decision from the central bank.
USD/CAD traded at $1.2595, down 0.25%, as better-than-expected Canadian manufacturing data and a rise in oil prices underpinned a move higher in the oil-sensitive Canadian dollar.
Meanwhile, sterling remained range bound against the dollar, falling to $1.3034, down 0.06%, ahead of an update due Thursday on the progress of Brexit negotiations to determine terms of the UK’s exit from the European Union.
USD/JPY fell to Y111.70, down 0.4%, as traders awaited the Bank of Japan’s monetary policy statement later on Wednesday.