Dollar Mixed After Housing Report

"The buck just dodged a bullet as housing data came in...slightly better than expected," said Brian Dolan, chief currency strategist at Forex.com, a division of Gain Capital. "The market had been bracing for a softer number...so the weak housing market remains in the picture, but [there was] no immediate sign of a further deterioration in May's data." In New York trading, the dollar was quoted at 123.35 yen, compared with 123.62 yen late Monday. The euro stood at $1.3405, compared with $1.3408. The British pound stood at $1.9883, compared with $1.9830. The dollar changed hands at 1.2404 Swiss francs, compared with 1.2419 francs. The euro was at 165.41 yen, compared with 165.76 yen, after touching an all-time high at 166.09 yen. Housing starts Starts of new homes in the United States fell by 2.1% to 1.47 million in May, as building permits for new construction rose 3% to 1.50 million, the Commerce Department said Tuesday. The figures were slightly stronger than expected in a survey of economists by MarketWatch. Both starts and permits had been forecast to fall to 1.46 million. The report comes a day after the National Association of Home Builders said its housing market index fell to its lowest level in 16 years. "Today's report does not alter the mixed picture of U.S. housing and sends the focus to next week's reports of new and existing home sales," said Ashraf Laidi, chief foreign-exchange analyst at CMC Markets in New York. German business sentiment Elsewhere, the euro came under pressure after a report showed the Zew indicator of German economic expectations pulled back to 20.3 in June, down from 24.0 in May. Economists had been expecting a reading of 29. The Zew current conditions indicator inched up to 88.7 in June, from 88.0 in May. The drop in the ZEW index is "an ominous reminder that the German recovery is still skating on thin ice," said David Brown, chief European economist at Bear Stearns, in a note. "This is another piece in the jigsaw that suggests the [European Central Bank] needs to tread carefully on rates ahead and that a target of 4.25% ... is more appropriate than the 4.50% or higher that the market is now looking for," he said.