The US dollar index rose by 0.27% on Wednesday, fueled by better-than-expected March housing starts, which increased by 10.8% month-over-month to 1.502 million, surpassing predictions of a decline. Additionally, March capital goods new orders nondefense ex-aircraft rose 3.3%, marking the largest increase in over five years. The Federal Open Market Committee (FOMC) voted 8-4 to keep the fed funds target rate unchanged at 3.50% to 3.75%, with three members dissenting against including an easing bias.
Heightened tensions between the US and Iran, particularly regarding control of the Strait of Hormuz, are enhancing demand for the dollar as a safe-haven asset. President Trump has instructed aides to prepare for an extended blockade in the region. In related economic news, Eurozone economic confidence fell to a nearly 5.5-year low of 93.0 in April, and German inflation data undershot expectations, adversely affecting the euro, which dropped to a two-week low against the dollar.
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