The dollar remained close to four-month highs against a basket of currencies Wednesday after giving up some of its recent gains against the yen, after Commerce Department data showed that U.S. housing starts surged 4.8 percent to a seasonally adjusted annual pace of 1.19 million units, suggesting at underlying strength in in the U.S. economy.
The dollar edged down 0.2 percent against the yen to 105.96 yen after hitting 106.53 yen on Tuesday, its highest level since June 24 when markets were shaken following Britain's surprise vote to exit the European Union.
Adding to the upbeat government data, the dollar was boosted by the BOJ announced intentions of implementing new easing policies at its July 28-29 meeting.
According to Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo, "If the BOJ doesn't take any action, the dollar/yen can fall back to 100 again. But now the focus has also shifted to the possibility of a U.S. interest hike which will likely underpin the dollar even in the event the BOJ decides not to ease this month.”
The dollar index, which tracks the U.S. unit against a basket of six major rivals, was steady at 97.068 DXY, after rising as high as 97.185 earlier in the session, its highest level since March 10.
Euro Down
The euro EUR was last down 0.1 percent at $1.1013, after plunging to a three-week low of $1.0995 earlier in the session. The next scheduled ECB policy meeting will take place on Thursday, its last one before an eight-week summer break but no new steps are expected to be taken by the central EU bank.