US housing starts data hurts dollar

Story link: US housing starts data hurts dollar

The US dollar was weaker again Tuesday, hurt by a new report from the Commerce Department showing that housing starts in the US were down in May, causing speculation that the Federal Reserve will not raise interest rates until the end of the year, if at all.

However, the euro was hurt as well, by a new ZEW report that showed investor confidence at a 15-year low in Germany in June, which was seen as a possible trigger for a reversal of course by the European Central Bank, which had signaled earlier this month that interest rates could rise as soon as July.

The greenback traded at $1.5506 to the euro just before noon in New York, while it took ¥108.0750 to buy a dollar.

The dollar was also lower in relation to the Brazilian real, at R$1.6200 to the dollar as the real was helped by speculation that the Central Bank of Brazil will hike interest rates again soon, while the South African rand gained to R8.0165 to the dollar and the Korean won was at 1,021.5 to the US currency.

The yen was lower in relation to the euro at ¥167.5758 to the shared currency.

Meanwhile, the pound was weaker after the Office of National Statistics released a report showing that consumer prices were up 3.3 percent in May from the same time last year and Bank of England Governor Mervyn King said that inflation is likely to remain above the Bank’s target or 2 percent well into next year.

At just before noon in New York the pound was worth $1.9530 while it traded at 79.39p to the euro.