USD weakens as mortgage applications surge 12.5% on rate stability

The US dollar faced selling pressure following a substantial 12.5% jump in MBA mortgage applications for the week ending June 6, reversing the previous week's 3.9% decline. The purchase index surged to 170.9 from 155.0, marking the highest level since early April, while refinancing activity soared with the index reaching 707.4 from 611.8. Despite the 30-year mortgage rate holding steady at 6.93%, the dramatic rebound in housing market activity suggests improving consumer confidence and potential economic resilience. This data contradicts recent concerns about housing market weakness and may influence the Federal Reserve's assessment of economic conditions. The dollar index retreated 0.2% as traders reassessed the likelihood of aggressive monetary tightening. Technical indicators show USD pairs approaching key support levels, with further downside possible if upcoming inflation data confirms economic stability.