The euro fell to 11-month lows against the broadly stronger dollar on Wednesday as signs that the U.S. recovery is progressing underpinned dollar demand ahead of Federal Reserve meeting minutes due out later in the day.
EUR/USD was down 0.29% to 1.3281, the lowest since September 13, from 1.3319 late Tuesday.
The pair was likely to find support at around the 1.3250 level and resistance at about 1.3325.
The dollar strengthened across that board after data on Tuesday showed that U.S. housing starts jumped 15.7% in July, while the number of new permits granted to home-builders also accelerated.
The data pointed to underlying strength in the housing sector, which stalled in the second half of last year.
The data offset a report showing that U.S. consumer prices rose just 0.1% in July.
Investors were looking ahead to the minutes of the Fed’s latest meeting due for release later Wednesday for further indications on the future direction of monetary policy.
Market watchers were also awaiting a speech by Fed Chair Janet Yellen in Jackson Hole on Friday.
The euro remained under pressure after data last week showed that the euro zone economy stagnated in the second quarter, adding to fears that the recovery in the region is running out of steam.
The weak data added to pressure on the European Central Bank to implement fresh measure to shore up growth after it cut rates to record lows in June.
Elsewhere Wednesday, the dollar climbed to more than four month highs against the yen, with USD/JPY rising 0.40% to 103.31.
The euro edged higher against the yen, with EUR/JPY easing up 0.09% to 137.23.