Currency traders typically scan Federal Reserve signals, trade policy shifts, and geopolitical crises when searching for the next catalyst behind a dollar move.
On June 16, the greenback’s decline came from a source few had on their radar
The dollar index dropped 0.12%, Barchart noted, after the Census Bureau published May housing starts figures that fell well short of forecasts from every major economist. That miss landed alongside a nearly 6% drop in crude oil prices to a three-and-a-half-month low, compounding the downward pressure on the currency. Together, crashing construction numbers and falling energy costs pointed toward lower inflation expectations, raising the possibility of earlier rate cuts from the Fed.
The Federal Open Market Committee opened its two-day policy meeting the same day, sharpening market attention to the data. Census Bureau data show May housing starts hit a 6-year low Privately owned housing starts fell 15.4% from April to a seasonally adjusted annual rate of 1.177 million units in May, the Census Bureau reported. That pace marks the weakest month for new residential construction since May 2020, when pandemic lockdowns paralyzed the homebuilding industry nationwide.