The Aussie was quoted higher in Asian trade with the yen weaker as investors look to volatile trade on dimming global growth prospects.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 99.28, up 0.12%.
Overnight, the dollar extended losses against the other major currencies on Wednesday, as disappointing U.S. economic reports weighed and as concerns over declining oil prices continued to support the safe-haven yen and Swiss franc.
The U.S. Commerce Department said that consumer prices fell 0.1% in December, compared to expectations for a flat reading. Year-over-year, consumer prices were 0.7% higher.
Core CPI, which excludes food and energy costs, increased by 0.1%, missing forecasts for a gain of 0.2%.
Separately, the U.S. Commerce Department said that housing starts fell 2.5% to hit 1.149 million units last month from November’s total of 1.179 million units. Analysts had expected a rise of 1.6% to 1.200 million.
Meanwhile, the number of building permits issued declined 3.9% to 1.232 million units from November’s total of 1.289 million. Economists had forecast a drop of 6.4% to 1.200 million units.
The safe-haven yen remained supported as oil prices dropped to the lowest level since 2003 on Wednesday, falling below $28 per barrel after the International Energy Agency said in a report that the supply glut in markets looks set to last until at least late 2016. The ongoing oil rout continued to weigh on the commodity-related Canadian dollar.