U.S. Dollar Mixed After Consumer Price Inflation

The U.S. dollar was trading mixed against its major rivals in European deals on Wednesday, after data showed that consumer prices turned negative in December amid plunging oil prices and a strong currency.

Data from the U.S. Department of Labor showed that the consumer price index, a key gauge of retail inflation, slipped 0.1 percent for December.

This came as a surprise to economists, who had expected the measure to remain flat.

Meanwhile, the Commerce Department report showed that the pace of newly started home building projects unexpectedly slowed down in December.

According to new government statistics, housing starts fell 2.5 percent in December. This brought the annual rate to 1.149 million units compared to November's revised pace of 1.179 million.

Economists had expected the measure to rise to an rate of 1.2 million.

The greenback was lower against most major rivals in Asian trading, as continued sell-off in oil stocked fears about global economy. The latest worries come as the International Energy Agency warned that the oil market could "drown in oversupply" until at least late 2016.

The greenback was trading at 1.0892 against the euro, following a 5-day decline to 1.0976 at 3:15 am ET. If the greenback extends gain, 1.07 is possibly seen as its next resistance level.

The greenback that reversed from an early 5-day low of 0.9992 against the Swiss franc was trading steady around 1.0016. The pair was worth 1.0028 when it ended yesterday's deals.

Survey results from the Centre for European Economic Research/ZEW showed that Switzerland's economic confidence declined markedly to a six-month low in January.

The ZEW-CS-Indicator for the economic sentiment declined 19.6 points to -3 in January. This was the lowest reading since July 2015, when it hit -5.4 points.

The greenback re-entered the negative territory against its U.K. rival with the pair trading at 1.4191, off early near 7-year high of 1.4125. At yesterday's close, the pair was trading at 1.4156. The greenback is likely to challenge support around the 1.43 mark.

Data from the Office for National Statistics showed that the U.K. unemployment rate fell further in three months to November and the employment rate hit a record high.

The ILO unemployment rate was 5.1 percent versus 5.8 percent in the same period of last year. It has not been lower since August to October 2005, the ONS said.

The greenback was trading steady at 116.85 against the Japanese yen, after recovering from its early 5-month low of 115.97. The greenback-yen pair was quoted at 117.62 at yesterday's close.

Looking ahead, the Bank of Canada's interest rate decision is due at 10:00 am ET. Economists expect the bank to cut its rates from 0.50 percent to 0.25 percent.