American focus: dollar remains under pressure

The dollar fell against most of its major counterparts after U.S. builders began work on more homes at an annualized rate than forecast in January and manufacturing rose, fueling appetite for higher-yielding assets.
U.S. builders broke ground on 596,000 homes at an annualized rate last month, according to Commerce Department data. The median forecast was for a rate of 539,000.
Manufacturing rose 0.3 percent in January, data from the Federal Reserve showed. Overall industrial production unexpectedly declined 0.1 percent as utilities, which had a decline in demand because of milder temperatures, and mining fell, the figures showed.
“Gradually the market seems to be more bullish on the world economic recovery, and so the risk-on trade will come more and more into fashion,” said Mamoru Arai, a senior currency trader at Mizuho Financial Group Inc. in New York.
The Swiss franc briefly gained versus the euro after Israel said two Iranian warships plan to sail through the Suez Canal and called the move a “provocation.” The pound slid against all of its most-traded counterparts after Bank of England Governor Mervyn King said inflation will peak this year and ease in 2012, damping speculation interest rates will rise.
“The big mover was sterling, with a less-hawkish-than- expected inflation report and mildly weaker employment data,” said Firas Askari, head currency trader in Toronto at Bank of Montreal.