2021.11.1720:52:00UTC+00Dollar Retreats After Climbing To Fresh 16-month High

The U.S. dollar climbed to a fresh 16-month high in the Asian session on Wednesday amid expectations the Federal Reserve will likely start hiking rates from mid-2022.

However, the currency retreated subsequently with traders digesting a slew of economic data from the U.S. and Europe.

Data released by the Commerce Department showed an unexpected decrease in new residential construction in the month of October, although the report also showed a bigger than expected spike in building permits.

The report showed housing starts slid by 0.7% to an annual rate of 1.520 million in October after tumbling by 2.7% to a revised rate of 1.530 million in September.

Meanwhile, building permits surged up by 4% to an annual rate of 1.650 million in October after plummeting by 7.8% to a revised rate of 1.586 million in September.

The dollar index, which advanced to 96.24 in the Asian session, dropped to 95.73 later on in the day, and is hovering around 95.80, down more than 0.1% from the previous close.

Against the Euro, the dollar is little changed at 1.1322 after having firmed to 1.1265 earlier in the day. Eurozone inflation increased as estimated in October, rising to 4.1% in the month from 3.4% in September, final data from Eurostat showed. The rate came in line with the flash estimate published on October 29. A similar higher rate was last registered in July 2008.

The dollar has weakened to 1.3492 against Pound Sterling, giving up nearly 0.5%. Official data showed that U.K. consumer price inflation advanced to 4.2% in October from 3.1% in September. The rate was forecast to climb to 3.9%.

The dollar is fetching 114.14 yen as against 114.83 yen Tuesday evening.

Against the Aussie, the dollar is trading at 0.7265, gaining from 0.7303.

The Swiss franc has firmed to 0.9280 a dollar, gaining from 0.9303.

The dollar is trading at C$1.2607, advancing from C$1.2561. Weak crude oil prices weighed on the Loonie.

Data from Statistics Canada showed that Canada CPI rose 0.5% on a seasonally adjusted monthly basis in October, after a gain of 0.6% in the previous month.

Core CPI, excluding food and energy, grew 0.2% following the 0.3% increase in September. The consumer price index rose 4.7% on a year-over-year basis in October, matching expectations.