Investing.com - The dollar rose to 11 month highs against a basket of other major currencies on Tuesday, while the pound dropped to fresh four-and-a-half month lows following the release of robust U.S. housing data.
GBP/USD was down 0.65% to 1.6619, the lowest level since April 8.
The dollar was boosted after data showed that U.S. housing starts jumped 15% in July to an annual rate of 1.093 million, up from 945,000 in June. In addition, the number of new permits granted to home-builders accelerated to an annual rate of 1.052 million, from 973,000 in June.
A separate report showed that the annual rate of inflation in the U.S. ticked down to 2.0% from 2.1% in June, while consumer prices rose 0.1% in July. It was the slowest increase in five months.
The pound weakened broadly earlier Tuesday after a report showing that the annual rate of inflation in the U.K. slowed sharply in July was seen as diminishing the likelihood that the Bank of England will raise rates this year.
The annual rate of inflation slowed to a two month low of 1.6% last month from 1.9% in June. Economists had expected inflation to tick down to 1.8%. U.K. consumer prices fell by a larger than expected 0.3% in July.
The euro fell to fresh nine-month lows, with EUR/USD dropping 0.33% to 1.3318.
The euro remained under pressure after poor economic growth data last week added to pressure on the European Central Bank to implement fresh measures to shore up the faltering recovery in the region.
USD/JPY advanced 0.26% to 102.83, while USD/CHF added 0.26% to trade at 0.9089.
The New Zealand dollar remained weaker, with NZD/USD down 0.31% to 0.8450. The kiwi turned lower after weak inflation reports earlier Tuesday indicated that the Reserve Bank is now likely to maintain a steady stance on rates following recent rate hikes.
AUD/USD slid 0.10% to 0.9316 and USD/CAD climbed 0.27% to trade at 1.0916.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.34% to 81.90, the highest since September 11.