USD weakens versus euro, yen

The US dollar was weaker in relation to the euro Tuesday as sentiment improved in Germany and demand for the greenback as a safe investment declined after housing starts were reported higher in the US in May.

The ZEW index of investor and analyst expectations stood at 44.8 this month, showing that German sentiment has risen to its highest level in three years, while the US Commerce Department reported that housing starts in the United States were up by 17.2 percent in May and applications for new building permits were 4 percent higher in the same month.

At nearly 10:30 a.m. in New York, the dollar traded at $1.3856 to the euro.

Both the pound and the Japanese yen also gained on the US dollar during the early session as the Bank of Japan kept interest rates at 0.1 percent and as the possibility grew that the Bank of England could raise rates on a report from the Office of National Statistics that UK inflation did not slow as much as expected in May.

Meanwhile, the greenback was hurt by reports that the leaders of Brazil, Russia, India and China were reported to be ready to talk about reducing their dependence on the US currency.

In mid-morning trade in New York, the pound traded at 84.54p to the euro while it took $1.6391 to buy a pound as the dollar took back some of its earlier decline against the UK currency.

The yen, meanwhile, traded at ¥96.81 to the US dollar and at ¥134.1416 to the euro.

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