In an immediate reaction to the publication of US data on Wednesday, the dollar strengthened positions against major currencies as a surprise increase in producer prices (PPI) appeared to outweigh some negative figures on the American housing market and investors await the publication of the minutes from the Federal Reserve’s latest meeting.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, last traded an intraday high of 97.09 after the data, compared to 96.87 prior to the reports and last traded at 96.97.
Producer price inflation in the U.S. unexpectedly rose in January, while core prices also increased more than estimated, official data showed on Wednesday.
The price increase could add credence to the belief that the Fed will hike interest rates twice this year, according to a Reuters poll of economists published on Tuesday.
In the housing market, data surprised to the downside, with both building permits and housing starts declining more than expected.
EUR/USD was trading at 1.1108 from around 1.1142 ahead of the release of the data, GBP/USD was at 1.4271 from 1.4312 earlier, while USD/JPY was at 114.34 from 114.16 earlier.