Euro records largest 1-day loss against dollar in 2 months

The euro had its worst day in two months against the dollar Tuesday.

The shared currency started falling on reports that the European Central Bank plans to increase its asset purchases in May and June, and buy fewer bonds during the summer months to avoid roiling markets during a period when liquidity is expected to thin out.

The dollar extended its gains after official data showed that construction on new U.S. homes increased by 20.2%in April to a seasonally adjusted annual rate of 1.14 million, the fastest rate of gains since 2007.

The shared currency EURUSD, -0.0718%  finished the day down about 1.5% against the dollar, recording its worst one-day loss since March 19, when it finished the session down about 1.8% against the greenback, according to FactSet data.

The euro traded as low as $1.1119 Tuesday, compared with $1.1320 on Monday, but bounced back to $1.1150 in recent trade.

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