WASHINGTON (dpa-AFX) - The U.S. dollar stayed firm on Wednesday as lingering concerns about growth and rising geopolitical tensions prompted traders to seek the safe-haven currency.
Reports showing spikes in coronavirus infections in several states in America, and fresh cases in China raised fears of about lockdown restrictions and a slower pace of economic recovery.
The Federal Reserve Chairman Jerome Powell cautioned on Tuesday that 'significant uncertainty remains about the timing and strength of the recovery.'
Traders also noted a report from the Commerce Department that showed new residential construction in the U.S. showed a notable rebound in the month of May, jumping by 4.3%. Meanwhile, building permits spiked by 14.4% to an annual rate of 1.220 million in May after plunging by 21.4% to a revised rate of 1.066 million in April.
The dollar index rose to 97.34 in late morning trades, and was last seen at 97.10, up 0.14% from previous close.
Against the Euro, the dollar firmed up to $1.1244 from yesterday's $1.1264. Eurozone inflation moved close to stagnation in May, as initially estimated, to the lowest since 2016, final data from Eurostat showed. Inflation slowed to 0.1% from 0.3% in April. The rate came in line with the estimate published on May 29.This was the lowest since June 2016. In the same period last year, inflation was 1.2%.
The Pound Sterling was weaker at $1.2555, easing by 0.15%. A report from the Office for National Statistics said U.K. inflation eased to a four-year low in May, easing to 0.5%, from 0.8% in April. On a monthly basis, consumer prices remained unchanged after easing 0.2% in April. Prices were expected to drop 0.1%.
The dollar fetched 107.01 yen, less than 107.31 on Tuesday. Japan posted a merchandise trade deficit of 833.388 billion yen in May, the Ministry of Finance said on Wednesday - down 13.7% on year. That beat forecasts for a shortfall of 970.8 billion yen following the 930 billion yen deficit in April.
Against the Aussie, the dollar was up slightly at 0.6885. Australia's leading index rose in May from the previous month, but it remained in deep negative territory consistent with an economic recession, data from the Westpac showed. The Westpac- Melbourne Institute Leading Index which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose to -4.79 percent in May from -5.08 percent in April.
The indicator growth rate has weakened sharply over the last six months, dropping to the -4.79 percent in May from -0.28 percent in December.
Against Swiss franc was firmer against the dollar at $0.9486. The Canadian loonie was weaker at 1.3564 a dollar. data from Statistics Canada said the consumer price index fell 0.4% on a year-over-year basis in May, down from a 0.2% decline in April. On a seasonally-adjusted monthly basis, inflation was up 0.1% in the month, following a 0.7% decline in April.
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