The euro rose on Wednesday as the dollar was hit by poor data.

The euro rose on Wednesday as the dollar was hit by poor data, but gains were capped by European debt fears before publication of minutes from the US Federal Reserve's last rate meeting.

The European single currency firmed to $1.4248 in early London deals, from $1.4234 late in New York on Tuesday.

Against the Japanese currency, the dollar eased to 81.05 yen from 81.36 yen on Tuesday.

The dollar has stumbled as new data showed that home construction in the United States plunged in April, underscoring the depth of the nation's years-old housing crisis.

The central bank left ultra-low interest rates unchanged for some time in a bid to shore up the economy's fragile recovery from recession.

Earlier this week, the euro was hurt by concerns over bailout talks for indebted euro zone nations after IMF head Dominique Strauss-Kahn was arrested and refused bail over rape charges.

In London on Wednesday, the euro changed hands at $1.4248 against $1.4234 late in New York on Tuesday, at 115.50 yen (115.79), £0.8800 (0.8759) and 1.2550 Swiss francs (1.2535).

The dollar stood at 81.05 yen (81.36) and 0.8808 Swiss francs (0.8801).

The pound was at $1.6190 (1.6248).

On the London Bullion Market, gold prices increased to $1,491.25 an ounce from $1,479 late on Tuesday.