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Dollar Losing Ground After Housing Data Disappoints


The dollar is down against all of its major rivals Friday afternoon. Investors were disappointed by the release of some softer than expected housing data this morning.

New residential construction in the U.S. unexpectedly showed a steep drop in the month of May, according to a report released by the Commerce Department on Friday. The report said housing starts slumped by 5.5 percent to an annual rate of 1.092 million in May from the revised April estimate of 1.156 million.

The significant decline surprised economists, who had expected housing starts to climb to a rate of 1.215 million from the 1.172 million originally reported for the previous month.

The Commerce Department said building permits also tumbled by 4.9 percent to a rate of 1.168 million in May from a revised 1.228 million in April. Building permits, an indicator of future housing demand, had been expected to rise to a rate of 1.250 million from the 1.229 million that had been reported for the previous month.

Meanwhile, Greece's creditors have reached an agreement to release the next tranche of funds to Athens.

The dollar climbed dropped to around $1.12 against the Euro Friday afternoon, from an early high of $1.1137.

Eurozone inflation slowed as estimated in May, largely reflecting the slowdown in energy price growth, final data from Eurostat showed Friday.

Headline inflation eased to 1.4 percent from 1.9 percent in April. The rate came in line with the flash estimate published on May 31.

Eurozone labor cost increased at a steady pace in the first quarter, Eurostat reported Friday. Hourly labor cost grew 1.5 percent on a yearly basis, the same rate as seen in the fourth quarter of 2016.

The buck has slipped to around $1.2785 against the pound sterling this afternoon, from an early low of $1.2756.

Japan's central bank maintained its monetary stimulus on Friday and upgraded its view on consumption.

The Bank of Japan policy board, led by Governor Haruhiko Kuroda, voted 7-2 to retain the central bank's target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion.

The BoJ board also voted to retain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The central bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The greenback has retreated to around Y110.835 against the Japanese Yen this afternoon, from a high of Y111.418 this morning.

by RTTNews Staff Writer

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