The dollar weakened against its major European competitors after the U.S. released a pair of economic numbers related to the housing market. Housing starts for August came in below expectations, but new building permits decreased less than anticipated. Existing home sales for the month showed continued improvement and exceeded the expectations of economists.
New housing construction in the U.S. rebounded in August from an unexpectedly large dip in July but failed to reach the levels expected by most economists. According to figures released Wednesday by the Commerce Department, new privately-owned housing starts came in at a seasonally adjusted annual rate of 750,000, a 2.3 percent increase from revised July levels. Most economists had expected the rate of new construction to come in at 768,000.
New building permits, a leading indicator for housing starts, fell modestly in August, falling to a seasonally adjusted annual rate of 803,000, 1.0 percent below the revised July rate of 811,000. Most economists had expected building permits to show a steeper drop to an annual rate of about 796,000.
Existing home sales in the U.S. continued to improve in the month of August, according to a report released by the National Association of Realtors on Wednesday, with sales rising by much more than economists had anticipated.
NAR said existing home sales jumped 7.8 percent to an annual rate of 4.82 million in August from 4.47 million in July. Economists had expected existing home sales to climb to an annual rate of 4.55 million.
Germany's two-year note fetched positive yield for the first time since June at an auction on Wednesday. The country raised EUR 4.084 billion from the sale of its federal notes due September 2014, Bundesbank said. The auction drew bids totaling EUR 8.446 billion against a target of EUR 5 billion. The yield on the two-year debt known as Schatz rose to 0.06 percent from zero percent seen in the previous sale on August 22.
The dollar had climbed to a 3-session high of $1.2992 versus the Euro early Wednesday, but has since scaled back to around $1.3070.
Eurozone construction output declined for the second consecutive month in July, but the rate of decrease slowed from June, Eurostat reported Wednesday. Construction output was down 0.3 percent from a month ago, when it fell 0.6 percent.
A leading indicator of the French economy increased modestly in July, following three consecutive monthly declines, data from a survey by the Conference Board showed Wednesday. The leading economic index increased 0.3 percent from the previous month to 113.3 in July, which followed decreases of 0.3 percent and 0.2 percent respectively in June and May.
Bank of England policymakers unanimously decided to maintain quantitative easing at GBP 375 billion and the interest rate unchanged at 0.50 percent, the minutes of the meeting held on September 5 and 6 showed Wednesday.
The nine-member Monetary Policy Committee discussed whether it was appropriate to modify or continue with the programme of asset purchases it had agreed at its July meeting.
The greenback has also pulled back from an early high of $1.6184 versus the pound sterling Wednesday, to around $1.6220.
The Bank of Japan on Wednesday announced a fresh round of stimulus to revive the economy by expanding the asset purchase by another JPY 10 trillion. The central bank also cut its assessment of the economy, saying the recovery is "pausing."
The total size of the program was lifted to JPY 80 trillion following an additional JPY 5 trillion purchase authorization each for Japanese government bonds and treasury discount bills.
In addition, the central bank extended the intended timescale for completing the asset purchases till the end of December 2013 compared to its previous deadline of end of June 2013.
The buck has retreated from an early high of Y79.207 versus the Japanese Yen, to around Y78.380.
Japan's leading economic index declined for a fourth consecutive month in July, final data released by the Cabinet Office showed Wednesday.
The leading economic index, which is designed to measure the direction of the economy in the months ahead, fell to 93 in July from 94.1 in June. The readings for July and June were revised up from 91.8 and 93.2respectively.
by RTT Staff Writer
For comments and feedback: email@example.com