Yahoo Finance Dollar Falters as Emerging-Markets Currencies Steady
Investing.com - The dollar fell against its rivals on Wednesday, shrugging off mostly upbeat U.S. economic data as emerging market currencies made a stand against the greenback on improved sentiment.
The U.S. dollar index, which measures the green against a trade-weighted basket of six major currencies, fell by 0.18% to 94.05.
U.S. housing activity for August was mixed, as building permits undershot economists' expectations, while housing starts beat.
The Commerce Department said Wednesday U.S. homebuilding rose 9.2% to a seasonally adjusted annual rate of 1.282 million units in August, well above economists’ estimates for a 5.8% increase.
The report also highlighted a sharp 5.7% decline in building permits to a rate of 1.229 million units, missing forecasts for a 0.1% decline.
The Bureau of Economic Analysis reported the U.S. current-account deficit decreased to $101.5 billion (preliminary) in the second quarter of 2018 from a revised $121.7 billion in the first quarter of 2018.
Yet the dollar was pressured by a rise in emerging market currencies, led by a firmer lira as investors weighed up the outcome of Turkey's medium-term economic program slated for Thursday.
USD/TRY fell 1.69% to 6.2690.
In a sign of improving sentiment on developing economies, JPMorgan's EM Local Government Bond exchange-traded fund received $169 million in inflows on Tuesday, the highest inflow since June 2017.
Elsewhere, GBP/USD rose 0.14% in a volatile session as gains from stronger U.K. inflation were mostly erased by Brexit-related angst.
Investors are awaiting clues on the EU's reaction to Britain's Chequers proposal revealed in July, as EU leaders meet on Wednesday. The proposal sets out rules that will govern the U.K's future relationship with the EU after Brexit.
Rabobank warned of reading too much into the EU's response to the proposal, as U.K. Prime Minister May would still have to get the plans approved by parliament.
"This would keep political uncertainty elevated and any relief rally in the pound on the news of a deal will likely be capped," the bank said.
EUR/USD rose 0.19% to $1.1687, while USD/CAD fell 0.32% to $1.2933.
The Canadian dollar was supported by a rise in oil prices, but reports that a US-Canada trade deal was unlikely to be agreed this week kept gains in check.
USD/JPY fell 0.19% to Y112.16 as the Bank of Japan stood pat on monetary policy overnight.
Related Articles
Forex - U.S. Dollar Falls as NAFTA Talks Continue
Dollar steady as investors digest Sino-U.S. tariff news
Turkey to cut growth forecasts, sources say, in difficult balancing act with markets
