The U.S. dollar climbed higher against most of its major counterparts on Wednesday, buoyed by comments from Federal Reserve Chair Jerome Powell that the central bank is determined to keep raising interest rates until there is convincing evidence that inflation moves down.
Powell said on Tuesday that the Fed won’t hesitate to raise rates beyond neutral levels until prices start falling back towards healthy levels again.
The Fed Chair added that “there could be some pain involved to restoring price stability,” but the labor market would remain strong, with low unemployment and higher wages.
A report released by the Commerce Department this morning showed a modest decrease in new residential construction in the month of April.
The Commerce Department said housing starts edged down by 0.2% to an annual rate of 1.724 million from a revised rate of 1.728 million in March.
The slight drop in housing starts came as single-family housing starts plunged by 7.3% to an annual rate of 1.100 million.
Meanwhile, the report showed building permits, an indicator of future housing demand, tumbled by 3.2% to an annual rate of 1.819 million from a revised rate of 1.879 million in March.
The dollar index climbed to 103.93, gaining 0.55% from the previous close.
Against the Euro, the dollar is trading at $1.0468, firming from $1.0553.
The dollar is trading at $1.2339 against Pound Sterling, strengthening from $1.2496.
The Japanese currency Yen is stronger against the dollar thanks to its safe-haven status, with the dollar fetching 128.25 yen a unit, compared with 129.36 yen on Tuesday.
The dollar has firmed against the Aussie, strengthening to 0.6952 from 0.7028.
The Swiss franc is stronger at 0.9883 a dollar, gaining from 0.9938. Meanwhile, the Loonie has weakened to 1.2891 a dollar, easing from 1.2810, weighed down by inflation data and weak crude oil prices.