The dollar index (DXY00) on Tuesday rose to a 2-week high and finished up by +0.22%. A slump in the yen to a 4-month low Tuesday supported the dollar after BOJ Governor Ueda signaled the BOJ would maintain an accommodative policy despite ending its negative interest rate campaign. The dollar extended its gains on Tuesday’s stronger-than-expected US Feb housing starts and building permits reports, hawkish factors for Fed policy. The dollar fell back from its best levels Tuesday as stock prices recovered, curbing liquidity demand for the dollar.
US Feb housing starts rose +10.7% m/m to 1.521 million, stronger than expectations of 1.440 million. Feb building permits, a proxy for future construction, rose +1.9% m/m to a 6-month high of 1.518 million, stronger than expectations of 1.496 million.
