Investing.com – The dollar fell against a basket of major currencies on Friday as better-than-expected housing data failed offset renewed political uncertainty in Washington amid reports that Special Counsel Robert Mueller was set to issue fresh subpoenas for the Trump campaign.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.27% to 93.59.
The greenback struggled to pare losses despite data showing October housing starts rose to their highest since Oct 2016, pointing to underlying strength in the US economy.
Housing starts surged 13.7% to a seasonally adjusted annual rate of 1.29 million units, the Commerce Department said on Friday.
The housing sector has showed a strong recovery in the South after disruptions from hurricanes Harvey and Irma. A rebound in the South, however, was not the main reason for the upbeat housing data as analysts noted that non-hurricane hit areas such as the Northeast and Midwest showed strong housing sector growth for the month.
The upbeat housing data failed to offset negative sentiment on the greenback which followed reports that Special Counsel Robert Mueller was set to issue fresh subpoenas for the Trump campaign, probing possible Russian interference in the 2016 U.S. election.
Losses in the greenback, however, were limited as the Canadian dollar came under pressure following data showing domestic inflation remained subdued in October, reducing expectations of further monetary policy action from the Bank of Canada.
The euro, meanwhile, traded higher against the greenback shrugging off dovish comments from European Central president Mario Draghi.
“We are not yet at a point where the recovery of inflation can be self-sustained without our accommodative policy.” Draghi said.
GBP/USD continued its recovery from a slump earlier this week, rising 0.07% to $1.3204.
USD/JPY fell 0.87% to Y112.08 as yen added to gains despite fading risk-off sentiment in Asia overnight.