U.S. housing starts rose more than expected in June as construction activity increased broadly, but downward revisions to the prior months' data pointed to a sector treading water in the second quarter.
Groundbreaking surged 4.8 percent to a seasonally adjusted annual pace of 1.19 million units, the Commerce Department said on Tuesday. Starts for April and May were revised lower, taking some shine off the report. Building permits increased 1.5 percent to a 1.15 million-unit rate last month.
Economists had forecast housing starts rising to a 1.17 million-unit pace in June. Groundbreaking in the second quarter was a touch higher than the average for the first three months of the year, suggesting residential construction was probably a mild boost to gross domestic product in the second quarter.
The dollar rose to a four-month high against a basket of major currencies on Tuesday after the release of data showing U.S. housing starts rose more than expected in June, underpinning a theme of strength in the U.S. economy.
Groundbreaking on U.S. homes surged 4.8 percent to a seasonally adjusted annual pace of1.19 million units, the Commerce Department said.
The dollar index .DXY, which tracks the greenback against six major currencies, rose to 97.126, its highest level since mid-March.
The rise in the dollar index was backed by a sizeable fall in the euro EUR=, which dipped to an 11-day low against the dollar of $1.1011. The euro was last down 0.5 percent at $1.1017.
The dollar also was boosted by expectations of upcoming central bank easing from the Reserve Bank of Australia and Reserve Bank of New Zealand.
The Australian dollar fell 1.5 percent to an 11-day low of $0.7476, while the New Zealand dollar hit a three-week trough, falling 1.35 percent to 0.7018, as investors ramped up bets that both central banks could ease monetary policy as early as next month.
Fed funds futures rates show investors see almost a 50/50 chance that the U.S. central bank raises rates by its December meeting, according to CME Group's FedWatch tool, compared with less than 20 percent a few weeks ago.
Oil prices fell as much 1 percent for a second day in a row on Tuesday as a rallying dollar and a global fuel glut offset forecasts for lower U.S. crude stockpiles that typically would have been bullish for the market.
U.S. crude stockpiles fell by 2.3 million barrels last week, trade group American Petroleum Institute (API) reported. That was just above a 2.1 million-barrels draw forecast in a Reuters poll. The U.S. government's Energy Information Administration (EIA) will issue inventory data on Wednesday.
Brent crude LCOc1 settled down 30 cents, or 0.6 percent, at $46.66 barrel. It fell 1.4 percent on Monday.
U.S. West Texas Intermediate (WTI) crude CLc1 fell 59 cents, or 1.3 percent, to settle at $44.65. WTI lost 1.6 percent in the previous session.
Reference: Reuters
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