Dollar Drifts Lower Against Major Counterparts

(RTTNews) - The U.S. dollar exhibited weakness on Tuesday, extending recent losses, amid expectations the Federal Reserve will be less aggressive with rate hike at its upcoming policy meeting later this month.

Reports that the European Central Bank is considering a 50-basis point rate hike later this week, comments by Reserve Bank of Australia policymakers that they saw the need for more policy tightening weighed on the greenback.

Data released by the Commerce Department showed housing starts in the U.S. slumped by 2% to an annual rate of 1.559 million in June after plunging by 11.9% to a revised rate of 1.591 million in May.

The continued decrease came as a surprise to economists, who had expected housing starts to jump by 2.3% to an annual rate of 1.585 million from the 1.549 million originally reported for the previous month.

With the unexpected decrease, housing starts dropped to the lowest annual rate since hitting 1.505 million in April of 2021.

The report showed building permits also fell by 0.6% to an annual rate of 1.685 million in June after tumbling by 7% to a rate of 1.695 million in May.

Building permits, an indicator of future housing demand, were expected to slump by 2.7% to an annual rate of 1.650 million.

The dollar index, which dropped to 106.40, recovered subsequently to 106.72, but still remained weak, trailing its previous close by about 0.6%.

Against the Euro, the dollar weakened to $1.0227 from $1.0145. The euro rose on reports that ECB officials are considering a rate hike of 50 basis points on Thursday, instead of a 25 basis-point move previously suggested by them.

The dollar dropped to $1.2004 against Pound Sterling, giving up more than 0.5%.

Against the Japanese currency, the dollar is up marginally, fetching 138.19 yen a unit.

The dollar is weak against the Aussie at 0.6901, easing from 0.6811.

The Swiss franc has firmed to 0.9690 against the dollar from 0.9774.

The dollar is weak against the Loonie, fetching C$1.2870 a unit, compared with C$1.2985 on Monday.