U.S. data released Wednesday showed construction on new homes in March rose 2.8% to a seasonally adjusted annual rate of 946,000. Industrial production in March grew 0.7%, beating forecasts of a 0.5% of economists. February’s industrial-production gain was revised to 1.2% from an initially reported 0.7%.
“With industrial production rising at a decent pace in March, the economy is now starting to show its true colors after the weakness triggered by the bleakest of winters,” said Paul Dales, a senior U.S. economist at Capital Economics, in a note.
The dollar rose to ¥102.28 from ¥101.89 late Tuesday.
Yellen is scheduled to speak at the Economic Club of New York at 12:25 p.m. Eastern and the Fed’s Beige Book is due at 2 p.m. Eastern.
The Fed has embarked on a path to normalize monetary policy, announcing a further cut in its monthly bond purchases to $55 billion at its March meeting. At this rate, the bond purchases could wind down by the end of the year, leading to speculation about when the Federal Reserve could begin to hike interest rates. Yellen said after the March meeting there could be an approximate six-month period between the end of bond purchases and the first rate hike, an idea that has been somewhat discounted by the release of the Fed’s March minutes.
The ICE dollar index , which measures the greenback against six rivals, fell to 79.786 from 79.795 late Tuesday. The WSJ Dollar Index , which pits the dollar against a wider basket of rivals, was unchanged at 72.96.
The Australian dollar rose to 93.75 from 93.57 U.S. cents late Tuesday, boosted by better-than-expected Chinese data.
China’s gross domestic product growth slowed to 7.4% in the first quarter from 7.7% previously, marking the slowest growth in 18 months. China is Australia’s largest trading partner.
The U.S. dollar pushed above 1.10 Canadian dollars after the Bank of Canada made no change to interest rates, as expected. In recent trade, the U.S. unit rose to 1.1004 Canadian dollars from 1.0977 Canadian dollars late Tuesday. The BOC left the target for its key rate, called the overnight rate, at 1%. In the accompanying statement, the central bank noted higher energy prices and a lower exchange rate should help push CPI inflation nearer its 2% target in “the coming quarters.”
The euro edged up to $1.3819 from $1.3812 late Tuesday. European-Union consumer prices in March rose 0.5% from a year earlier, marking the lowest annual rate since November 2009. The tepid inflation rate is the latest to cause concern about deflation in the euro zone, which could prompt further easing from the European Central Bank.
The British pound rose to $1.6789 from $1.6723 late Tuesday. The U.K. unemployment rate was an average of 6.9% between December and February, falling from 7.1% in the prior three months. The unemployment rate is now below the Bank of England’s threshold of 7%, which is one of several indicators used by the bank to determine the path of interest rates. The Bank of England said in August it wouldn’t consider raising interest rates until the unemployment rate fell to 7%.