Investing.com – The dollar was unchanged against a basket of major currencies shrugging off weaker-than-expected housing data as yields moved off lows helping the greenback pare losses.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.01% to 89.80.
The Commerce Department said Monday new home sales fell 7.8% to a seasonally adjusted annual rate of 593,000 units last month, the lowest level since August 2017. That missed economists’ forecasts. The negative headline number, however, was downplayed by market participants citing weather-related issues weighed on housing activity last month.
Amherst said single-family starts, which tend to run well ahead of single-family building permits, were “noticeably below permits in December and in-line with them in January,” suggesting that adverse weather conditions may have weighed on new home sales. The research firm added that with housing starts rising and sales falling in January, the market is "seeing a replenishment in new homes for sale ahead of the spring selling season.”
A sharp reversal in sterling against the dollar, meanwhile, also helped the greenback recover losses with some citing a £2.3 billion option expiry with a 1.4 strike at 10 a.m. ET as the main for move lower in cable.
GBP/USD fell 0.19% to $1.2296 after setting an intraday high of $1.3952 amid remarks by Bank of England Deputy Governor David Ramsden, who said he now sees the case for hiking rates sooner than later.
EUR/USD fell 0.05% to $1.2298 as European Central Bank president Mario Draghi said that while the euro area economy is expanding robustly, inflation has yet to show a sustained upward trend.
USD/CAD rose 0.32% to $1.2695 while USD/JPY rose 0.22% to Y107.03.