The dollar strengthened against its peers today trimming recent losses as the greenback was supported by wide spread anticipation of the Federal Reserve’s announcement scheduled for tomorrow. Data released from the US Commerce Department revealed that housing starts dropped by 17.0% totaling 897,000 units in February from 1.081 million in January which compounded forecasts of a 2.4% decrease to 1.049 million. Building permits granted in February rose by 3.0% while experts forecast a decline of 0.5%. Investors were looking towards tomorrow’s Fed statement for an indication on the timing of a rate increase.

The euro strengthened against the dollar following the release of data from the ZEW Centre for Economic Research which revealed that its German economic sentiment index gained 1.8 points to a reading of 54.8 in March from 53.0 in February while experts had forecast a reading of 58.2. The euro zone economic sentiment index rose to its highest level in 13 months to 62.4 in March from 52.7 in February surpassing expectations of an increase to 58.2. Euro zone consumer price inflation dropped 0.3% in February matching forecasts while euro zone inflation declined by 0.6% in January well below the European Central Bank’s close to but under 2% target.

The pound weakened against the dollar with the pair down over 0.7% as indications from the Bank of England that interest rates will remain unchanged well into next year put increased pressure on the pound and while the greenback garnered support by the market anticipating the outcome of tomorrow’s statement by the Fed. The pound was weaker against the euro.

The yen held its ground against the dollar with the pair still trading in a tight range above its 121 handle. The Bank of Japan kept its stimulus program in place and lowered its view on inflation due to current drop in oil prices. Annual core consumer inflation for Japan wound down to 0.2% in January far off the BOJ?s 2% target.

The Australian and New Zealand dollars weakened considerably against the dollar. The Aussie dollar had been pressured after the Reserve Bank of Australia announced that it sees grounds for an additional rate decrease after having lowered its cash rate to 2.25% in February which still needs to permeate the economy.

The Canadian dollar held its ground against the greenback whose advances were curtailed by weak US housing data. The loonie had weakened on the back of data released by Statistics Canada which revealed that manufacturing sales decreased by 1.7% in January while experts had forecast a decrease of 1.0% following a 1.6% increase in December.

Disclaimer: This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.