(menafn – ecpulse)
The U.S. dollar advanced against majors ahead of a U.S. report expected to show that housing starts climbed to a three-month high in February, giving clearer signs the world's largest economy is on the right track of recovery.
Housing starts probably edged up to 700,000 annually in February from 699,000 recorded a month earlier, today's report due at 12:30 GMT will show.
In the Fed's latest meeting Bernanke predicted a “moderate economic growth” gradual decline in joblessness as the labor market strengthens.
The green currency managed to rebound on Tuesday trading after three days of decline on signs the U.S. economy is improving without stimulus and on worries in markets after BHP Billiton said China's steel production is slowing which enhanced safety demand on the greenback.
The dollar index, which tracks the dollar movements versus a basket of major currencies, is currently hovering around 79.70 compared with the day's opening at 79.45, where it has a solid support around 79.30 which represents SMA 200 level.
Against the yen, the greenback showed some advance taking the pair to 83.65 after recording a high of 83.83 and a low of 83.32.The suggested trading range for today is among key support at 82.00 and key resistance now at 85.00.
Moreover, there are concerns from the euro area on how leaders will balance between promoting growth and endorsing austerity measures.
The U.S. Treasury Secretary Timothy Geithner, according to the congressional testimony released today, said that Europe still needs a long period of time to achieve fiscal sustainability, warning that indebted nations don’t need to depend on heavy austerity to fix budgets on fears those measures might weigh heavily on the pace of growth.
In the same context, Charles Dallara, managing director of the Institute of International Finance commented on the situation in Europe stating that “it is not just balancing fiscal austerity and economic growth, which is a huge challenge, but balancing regulatory reform versus providing credit to support economic recovery. Right now there’s just too much focus on austerity.”
The EUR/USD pair is currently is currently around 1.3203, where it finds support from SMA 100 level, after touching the day's high at 1.3243 while the low was recorded at 1.3186. The trading range for today is among key support at 1.3005 and key resistance at 1.3460.
Moving to the British pound, it fell against the green currency after data showing that CPI slowed less than analysts' predictions recording 3.4% in the year ended February compared with a prior of 3.6% in January and forecast of 3.3%.
Tomorrow, U.K. Chancellor of the Exchequer will announce U.K. annual budget next week, amid expectations there may be a cut in top income tax rate on earners over £150,000 from 50p to 40p.
The pair is trading around 1.5850 after recording a high of 1.5896 and a low of 1.5833, where the trading range for today is among key support at 1.5640 and key resistance at 1.6075.