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The dollar was trading higher against most of its major rivals on Tuesday as traders eye the Fed’s rate statement and press conference on Wednesday amid uncertainty over the bank’s next move.
Official data released Tuesday was mixed and largely ignored by traders who are more concerned by what the Fed has to say. U.S. consumer prices rose in line with expectations in May and consumer price inflation rose 1.4% from a year earlier, in line with forecasts and up from 1.1% in April. Core inflation, which excludes food and energy costs, rose 0.2% in May, also in line with expectations. However, consumer prices rose 0.1%, slightly below expectations for a 0.2% increase.
In a separate report, the Commerce Department said the number of building permits issued in the U.S. fell 3.1% in May to a seasonally adjusted 0.974 million, below expectations for a decline of 2.8% to 0.975 million units. U.S. housing starts rose by 6.8% last month to hit a seasonally adjusted 0.914 million, below expectations for an increase of 11.4% to 0.950 million.
The dollar remained higher against most of its major rivals throughout the U.S. session, the exception being EUR/USD which strengthened after official data showed that the ZEW index of German economic sentiment improved to 38.5 in June from May’s reading of 36.4. Analysts had expected the index to rise to 38.1.
EUR/USD closed the U.S. session up 0.28% to 1.3403, down from a high of 1.34172.
USD/JPY closed up 0.73% to 95.18, down from a high of 95.77.
GBP/USD closed down 0.44% at 1.5652, down from a high of 1.57256.