The dollar consolidated against the yen on Wednesday, but inched to fresh highs against a basket of its major rivals thanks to strong US data on Tuesday and rising expectations that the Bank of Japan will take additional easing steps.
The Commerce Department data showed that US housing starts surged 4.8 percent to a seasonally adjusted annual pace of 1.19 million units, highlighting a strong sentiment over the US economy.
USD/JPY traded just above 106 on Wednesday, after hitting 106.53 on Tuesday, its highest level since June 24 when markets were roiled in the wake of Britain's surprise vote to exit the European Union.
EUR/USD fell to 1.0981, a three-week low while GBP/USD dropped to 1.3062 as market participants now see a 50/50 chance that the Federal Reserve will increase rates at its December meeting compared with only 20% just a few weeks ago.
The European Central Bank will hold a regular policy meeting on Thursday, its last one before an eight-week summer break. It is not expected to take any additional easing steps.
