The U.S. dollar fell against major currencies in late New York trading on Tuesday as upbeat U.S. housing starts data and Germany business sentiment stimulated market sentiment.
The U.S. Commerce Department on Tuesday reported that U.S. housing starts jumped 9.3 percent in November to the highest annual rate since April 2010, much higher than analysts expected.
Also, Germany's Ifo business-climate index, which based on a monthly survey of some 7,000 companies, rose to 107.2 in December from 106.6 in November, posting its biggest monthly rise since February.
The upbeat economic data helped stimulate optimism and boosted the stock market. The dollar, on the other hand, fell as investors rushed out of safe haven bets.
In late Tuesday trading, the dollar bought 77.87 Japanese yen, compared with 77.95 from late Monday. The euro rose to 1.3076 dollars from 1.3017.
The British pound also rose to 1.5660 dollars from 1.5520. The dollar fell from 0.9364 Swiss francs to 0.9313, while dropping to 1.0311 Canadian dollars from 1.0365.