The euro rose to $1.3847, from $1.3823 before the data's release. Against the yen, the dollar fell to 76.79 from 76.84 previously.

US housing starts surged in September at their fastest annual pace in 17 months on a big increase in groundbreaking for multi-family units, while permits for future construction fell, a government report showed on Wednesday.

"The housing starts were strong, which is the first sign of life in housing we've seen in a while," said Boris Schlossberg, head of research at GFT Forex in Jersey City, New Jersey. "That's welcome."

Copyright Reuters, 2011