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Dollar Recovers After Initial Weakness Despite Disappointing Data

The U.S. dollar edged up marginally, rebounding from lower levels despite disappointing data on consumer confidence and building permits.

The dollar index advanced to 96.73, gaining about 0.14%, rising from a low of 96.45.

According to a report from the Conference Board, U.S. consumer confidence unexpectedly decreased in the month of March.

The Conference Board said its consumer confidence index dropped to 124.1 in March after jumping to 131.4 in February. Economists had expected the index to rise to 133.0.

The unexpected decrease by the headline index came as the present situation index tumbled to 160.6 in March from 172.8 in February.

The percentage of consumers calling business conditions "good" slumped to 33.4% from 40.6%, while those saying business conditions are "bad" edged up to 13.6% from 11.1%.

The Conference Board noted consumers' optimism about the short-term future also moderated in March, with the expectations index sliding to 99.8 from 103.8 last month.

"Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report," said Lynn Franco, Senior Director of Economic Indicators at the Conference Board.

"Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term," she added. "However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth."

Earlier in the day, data released by the Commerce Department showed housing starts plunged by 8.7% to an annual rate of 1.162 million in February after surging up by 11.7% to a revised rate of 1.273 million in January.

Economists had expected housing starts to dip to a rate of 1.213 million from the 1.230 million originally reported for the previous month.

Building permits fell by 1.6% percent to an annual rate of 1.296 million in February after dipping by 0.7% to a revised rate of 1.1317 million in January.

Building permits, an indicator of future housing demand, had been expected to drop to 1.300 million from the 1.345 million originally reported for the previous month.

The dollar was weak against the British Pound, though just marginally, at 1.3210 a sterling. The focus was on Brexit debates and votes, scheduled for Wednesday.

On Monday, members of parliament temporarily seized control of the Brexit process from the British Prime Minister Theresa May in a move that gives them control of Parliament's agenda on Wednesday.

It is feared that an a disorderly exit from the EU by the U.K. may well spell trouble for markets across the globe.

Against the Euro, the dollar was gaining in strength, edging up to $1.1278, from $1.1315 on Monday.

Survey results from GfK showed Germany's consumer confidence is set to slightly weaken in April, driven by some easing in households' income expectations and the propensity to buy.

The forward-looking consumer confidence index fell to 10.4 from a revised 10.7 in March, the Nuremberg-based market research group said.

Economists had expected the reading to remain unchanged at March's original 10.8.

The economic expectations index of the survey rose seven points to reach 11.2 in March. That was the first increase after five consecutive months of decline.

The income expectations index fell 4.1 points to reach 55.9 in March and the propensity to buy index decreased 3.4 points to 50.2, which was the lowest reading in over two years.

The dollar was up more than 0.5% against the Japanese yen with the latter dropping to around 110.50 against the former.

The dollar was gaining about 0.24% against Swiss franc, while losing 0.1% and 0.28% against the loonie and Aussie, respectively.

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