Forexpros – The U.S. dollar was mixed against its major counterparts on Tuesday, as market sentiment was hit by data which painted an uneven picture of the U.S. economic recovery, while the Canadian dollar rallied following a hawkish rate statement by the Bank of Canada.
During U.S. morning trade, the dollar ticked up and down between small gains and losses against the euro, with EUR/USD dipping 0.03% to hit 1.3137.
The euro had climbed to a two-day high against the greenback earlier, after an auction of Spanish short-term government bonds saw the country raise the full targeted amount of EUR3 billion, but at sharply higher yields.
Elsewhere, data showed that German economic sentiment improved unexpectedly in April, rising for the fifth consecutive month.
The greenback was lower against the pound, with GBP/USD gaining 0.23% to hit 1.5935.
Sterling remained supported by diminished expectations for another round of easing from the Bank of England after official data showed that the consumer price index ticked up last month.
The Office for National Statistics said consumer price inflation rose to 3.5% year-on-year in March, in line with expectations after increasing 3.4% the previous month.
Elsewhere, the greenback was up against the yen, but was little changed against the Swiss franc, with USD/JPY adding 0.33% to hit 80.67 and USD/CHF inching up 0.02% to hit 0.9147.
Earlier Tuesday, Japan pledged to provide USD60 billion to the International Monetary Fund’s effort to expand its lending resources and shield the global economy against the effects of the ongoing debt crisis in the euro zone.
The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD tumbling 1.12% to hit 0.9881, AUD/USD rising 0.36% to hit 1.0392 and NZD/USD down 0.21% to hit 0.8193.
The Canadian dollar rallied after the BoC said that higher interest rates “may become appropriate” as the economy gains momentum after it left its benchmark interest rate unchanged at 1% in a widely expected decision earlier.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was slightly lower, slipping 0.12% to hit 79.64.
In the U.S., official data showed that industrial production was unexpectedly flat for the second consecutive month in March, confounding expectations for a 0.3% increase.
The report came after official data showed that the number of building permits issued in the U.S. increased unexpectedly in March, rising to the highest level since September 2008, while housing starts dropped to the lowest level in six months.
The number of building permits issued last month rose 4.5% to a seasonally adjusted 0.747 million, confounding expectations for a modest decline of 0.7% to 0.710 million.
U.S. housing starts fell to the lowest level since October, dropping 5.8% to a seasonally adjusted 0.654 million from a revised 0.694 million units in February. Economists had forecast housing starts to rise 1.0% in March to 0.705 million units.
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