The US dollar fell against the yen and was mixed against the majors after data showed US housing starts fell more than expected in May. The Commerce Department said housing starts dropped 10%, the lowest level since December and the largest percentage decline in 14 months. The National Association of Home Builders reported new building permits dropped by 5.9% in May, the lowest in one year.

The euro rallied against the dollar, suggesting that the single currency is continuing its correction from a four-year low versus the dollar. In addition, Spain raised 5.2 billion euros in a debt auction, indicating that investors have raised their risk tolerance for higher-yielding currencies and the euro.

The British pound pared losses against the dollar after data showed UK's jobless claims fell more than expected in May. Official data showed the number of people claiming jobless benefits fell by 30,900 in May, more than the forecasted fall of 20,000. Britain's jobless rate is up to 7.9% but is lower than the forecasted 8%. Investors anticipate the new government's emergency budget plan to be released next week.

The Canadian dollar slipped against the dollar after eurozone debt worries resurfaced as newspaper El Economista, reported that the European Union, the IMF, and the US Treasury were drawing up liquidity plan for Spain in the case it falls into a Greek-style depression. Domestically, the Canadian Real Estate Association reported sales of existing homes fell 9.5% in May from the previous month. Investors await comments that may hint interest rate hikes from BoC's Governor Mark Carney, who will deliver a speech later in the day.

The Japanese yen rose against most major currencies followed by resurfacing concerns over the euro debt crisis and reports showing a slower recovery in the US economy. Negative reports abroad have increased the demand for the yen as a safe haven currency.

The Australian and New Zealand dollars climbed higher against both the dollar and the yen. The Kiwi held firm after New Zealand Finance Minister Bill English said interest rates were likely to rise, however less aggressively than the previous increase.

The Mexican peso dropped against the dollar in early trading after US housing starts in May dropped to its lowest rate since December 2009.

Indicative rates: EUR/USD

1.2356

USD/JPY

91.04

GBP/USD

1.4865

USD/CAD

1.0204

USD/MXN

12.5801

USD/CHF

1.1221

AUD/USD

0.8687

NZD/USD

0.7019

10-Year Treasury Note Yield: 3.286% Dow Jones Industrial Average: 10,405.92 -0.01%