Dollar down against major currencies
U.S. currency edges higher versus euro, but slips versus pound and yen amid reports of contracting economy.
NEW YORK (CNNMoney.com) -- The dollar lost ground against major currencies Wednesday as stocks fell hard and reports showed an economy in contraction.
A selloff gained momentum near the close Wednesday and the major indexes tumbled to 5-1/2 year lows (full story).
The U.S. currency fell against the British pound, which rose to $1.4972 from $1.496 late Tuesday. The dollar also lost ground Wednesday against the Japanese yen at ¥95.93 from ¥96.75 Tuesday in New York.
The greenback rose against the 15-nation euro, which fell to $1.2520 from $1.263 Tuesday.
The dollar posted another day of consolidation, according to Sacha Tihanyi, associate currency strategist for Scotia Capital. While the dollar has, in the past few weeks, gained ground amid volatile markets, it failed to do so Wednesday, with the yen strengthening instead.
"Today the dollar was weighed down by increased uncertainty in equities," he said.
Several economic reports released Wednesday point to a contracting economy. A key inflation reading fell 1% last month, according to the Labor Department. The Consumer Price Index was much weaker than September's flat reading and exceeded the 0.8% decline a consensus of economists surveyed by Briefing.com had forecast.
Two key measurements of home construction hit record lows in October, according to the Commerce Department. Housing starts reached an annual rate of 791,000 last month, the lowest level since the department began tracking starts in 1959.
Building permits fell 12% to an annual rate of 708,000 in October, breaking the previous low of 709,000 in March 1975. The annual rate for September was revised to 805,000. 
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