Dollar gains broadly on upbeat U.S. housing data: July 20, 2016

Market Review - 19/07/2016  22:29GMT

Dollar gains broadly on upbeat U.S. housing data

The greenback gained broadly across the board on Tuesday after the release of upbeat U.S. housing data increased speculation that the country's economy is strengthening.

U.S. housing starts and building permits in June beat forecasts. The Commerce Department said housing starts rose 4.8% to a seasonally adjusted 1.189 mn units from May. Analysts had expected a rise of 0.5% in housing starts to 1.170 mn units.
May's figure was revised to 1.135 mn units from an initial estimate of 1.164 mn. Building permits were up 1.5% at 1.153 mn units vs. forecast rise of 1.150 mn.

Versus the Japanese yen, although the greenback edged lower to session low at 105.66 in Asia, price pared its losses and rallied to an intra-day high at 106.53 at New York open on upbeat U.S. data. However, dollar pared its gains and retreated to 105.89 in New York afternoon.

The single currency briefly rebounded to 1.1081 in Asian morning before falling sharply to 1.1048 in early European morning. Euro met renewed selling at 1.1078 and tumbled to an intra-day low at 1.1000 in at New York open on dollar's strength before staging a short-covering rebound to 1.1019 in New York afternoon.

The British pound met selling interest at 1.3275 in Australia and dropped to 1.3204 in Asian morning and continued to ratchet lower, eventually tumbling to an intra-day low at 1.3074 in New York afternoon on dollar's weakness before stabilising.

Data to be released on Wednesday:

Australia Weatpac leading index, Germany producer price index, Eurozone current account, U.K. unemployment rate, Claimant count unemployment change, average earning, Swiss investor sentiment and U.S. mortgage application.