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The U.S. dollar traded mixed to higher against the most major currencies despite the mixed housing market data from the U.S. Housing starts in the U.S. rose 4.4% to 1.089 million annualized rate in December from a 1.043 million pace in November, beating expectations for a decrease to 1.040 million. November's figure was revised up from 1.028 million units.
Building permits in the U.S. decreased 1.9% to 1.032 million annualized rate in December from a 1.05 million pace in November, missing expectations for a rise to 1.054 million units. Permits figures have been above a 1 million-unit pace since July 2014.
The euro traded mixed against the U.S. dollar in the absence of any major economic reports from the Eurozone. Investors are awaiting the European Central Bank's monetary policy meeting tomorrow.
European Central Bank (ECB) officials said on Wednesday that the ECB Executive Board has proposed to purchase 50 billion euros in assets a month through the end of 2016.
The British pound traded mixed against the U.S. dollar. In the morning trading session, the pound declined against the greenback as Bank of England's (BoE) last meeting minutes weighed on the pound.
The U.K. unemployment rate declined to 5.8% in the September to November quarter from 6.0% in the previous three months to August, beating expectations for a decline to 5.9%.
The claimant count decreased by 29,700 people in December, exceeding expectations for a drop of 24,200 people, after a decrease of 29,600 people in November. November's figure was revised from a decline of 26,900.
Average weekly earnings, excluding bonuses, climbed by 1.8% in the September to November period, missing expectations for a 1.9% increase, up from a 1.6% rise in the previous three months.
Average weekly earnings, including bonuses, rose by 1.7% in the September to November period, in line with expectations, after a 1.4% increase in the previous three months.
The Bank of England released its last meeting minutes. All members voted to keep the central bank's monetary policy unchanged. During the five previous months, two members, Ian McCafferty and Martin Weale, voted to raise interest rates to 0.75% from 0.5%.
The Canadian dollar dropped against the U.S. dollar as the Bank of Canada cut its interest rate. The BoC lowered its interest rate to 0.75% from 1.0% today. The BoC's interest rate had been at 1.0% since September 2010.
The central bank said that it responded to falling oil prices which will be negative for growth and inflation.
The BoC also cut it growth forecasts. Canada's economy is expected to grow by 1.5% in the first half of 2015, down from its previous estimate of 2.4%. The growth for 2015 was lowered to 2.1% from 2.4%.
Inflation is expected to be below the BoC' target range of 1 to 3% for most of 2015.
The New Zealand dollar declined against the U.S. dollar. In the overnight trading session, the kiwi traded lower against the greenback after the weaker-than-expected consumer inflation data from New Zealand. New Zealand's consumer price inflation fell 0.2% in the fourth quarter, missing expectations for a flat reading, after a 0.3% gain in the third quarter.
On a yearly basis, the consumer price index in New Zealand rose 0.8% in the fourth quarter, missing forecasts of a 0.9% gain, after a 1.0% increase in the third quarter.
That could mean that the Reserve Bank of New Zealand will leave its interest rate on hold for a longer period.
The Australian dollar declined against the U.S. dollar. In the overnight trading session, the Aussie rose against the greenback after the solid consumer sentiment index from Australia. The Westpac Banking Corporation's consumer sentiment index for Australia increased 2.4% in January, after a 5.7% drop in December.
The Japanese yen traded slightly lower against the U.S. dollar. In the overnight trading session, the yen traded climbed against the greenback after the Bank of Japan (BoJ) kept its monetary policy unchanged. The BoJ cut its inflation forecast to 1.0%, down from a previous estimate of 1.7%. Growth forecast for 2016 was raised from 2.1% to 2.2%.
The BoJ Governor Haruhiko Kuroda said at the press conference that consumer inflation will slow due to lower oil prices. He noted that the time when the BoJ will reach 2% inflation may vary as oil prices are very volatile. Kuroda also said that consumption is firm and the economy is recovering moderately.
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