The US dollar hit its lowest level against the euro in a week on Thursday after traders concluded that recent weakness in US economic data could delay the first Federal Reserve rate hike.
US housing starts rose far less than expected in March and permits recorded their biggest drop since last May, while a separate report showed a surprise rise in the number of people seeking unemployment aid last week.
Traders interpreted the data as another sign that the US economy struggled to bounce back in March, reducing the likelihood of a Fed rate hike by June. A Fed hike is expected to boost the dollar by driving investment flows into the United States.
"This is more dollar weakness, driven by the market coming around to the fact that these economic releases are weaker," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. "Everything across the board screams for the Fed to be patient." The Australian dollar was last up 1.24 percent against the dollar at $0.7777, hovering at a nearly three-week high hit earlier in the session, after data showed employment sped past expectations in March while jobs created in February were revised up sharply.
The euro was last up 0.16 percent against the dollar at $1.06990 after hitting a one-week high of $1.07695. The dollar was mostly flat against the Swiss franc at 0.96405 franc. The dollar was last up 0.12 percent against the yen at 119.265 yen. The dollar index was last down 0.22 percent at 98.114.
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