Updated from 12:21 p.m. EDT

The dollar was moving up against the euro and the British pound Wednesday as traders shrugged off a bearish housing report and a downturn in U.S. stocks.

Euros were trading for $1.422, below their $1.4258 level late Tuesday. Pounds were selling for $2.0472, down from $2.051 previously.

Speculators who had previously sold the dollar short in the hopes of buying it back at a lower price for a profit have been reversing the trades and hence bidding up the value of the U.S. currency, says Joe Brusuelas, chief U.S. economist at IDEAglobal in New York.

"The dollar has been massively oversold," he says. "They have been short-covering for a couple of days now."

Meanwhile, the yen was stronger, rising to 113.9 from 114.92 a day ago. U.S. dollars were also buying 97.2 Canadian cents, up from 96.6 cents previously. The Australian dollar was virtually unchanged.

The PowerShares DB G10 Currency Harvest ( DBV) exchange-traded fund, which tracks a basket of currencies, was falling 0.8% recently.

The CurrencyShares Euro Trust ( FXE) was down 0.3%, while the CurrencyShares Japanese Yen Trust ( FXY) was up 1% in recent market action.

Elsewhere, the CurrencyShares British Pound Sterling Trust ( FXB) was slipping 0.2%, and the CurrencyShares Canadian Dollar Trust ( FXC) was down 0.7%.

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