The dollar slid lower against the other major currencies on Wednesday as investors’ awaited U.S. inflation data and the minutes of the Federal Reserve’s latest meeting later in the day for indications on the timing of a rate hike.
EUR/USD rose 0.39% to 1.1068, pulling back from Tuesday’s one-week lows of 1.1016.
The dollar was also lower against the yen and the Swiss franc.
The greenback had strengthened across the board after data on Tuesday showing that U.S. housing starts rose to an almost eight-year high in July.
The Commerce Department reported that housing starts rose 0.2% to an annual pace of 1.21 million units, the highest level since October 2007.
Building permits fell 16.3% in July, but that was after three consecutive months of strong gains.
Investors were looking ahead to a U.S. inflation report for July later Tuesday. An uptick in consumer prices would reinforce expectations higher interest rates.
Market watchers were also hoping that the minutes of the Fed’s July meeting would provide more clarity on its plans to hike short-term interest rates for the first time since 2006.
The US dollar index, which tracks the greenback against a basket of six major rivals, slid 0.25% to 96.74 from Tuesday’s highs of 97.1.
The Australian dollar regained ground, with AUD/USD up 0.22% to 0.7358, off overnight lows of 0.7314.
The Aussie came under renewed selling pressure after Chinese stocks fell on again on Wednesday, following a more than 6% drop in the previous session amid fears over the growth outlook for China.
Meanwhile, the pound remained supported after data on Tuesday showing an increase in inflation bolstered expectations for a rate hike by the Bank of England in the coming months.
GBP/USD was up 0.12% to 1.5680, not far from the seven-week high of 1.5716 set on Tuesday.