Sterling slipped to a five-week low against a broadly stronger dollar on Thursday after US jobless claims fell to their lowest in four years and Federal Reserve minutes dampened expectations of further monetary easing in the near future.
The pound dropped 0.6 percent to as low as $1.5393 - a level not seen since June 6 - after the US jobs data showed initial claims for state unemployment benefits fell more than economists had expected. Sterling was down slightly against the euro at 79.04 pence, off a 3-1/2 year high of 78.71 pence touched on Wednesday, despite the euro extending losses against the dollar and Japanese yen.
"Sterling's playing the usual middle man role. It does seem as though euro/sterling is trying to find a bottom, but for the most part sterling is taking its cue from euro/dollar," said Daragh Maher, currency strategist at HSBC.
Investors sold perceived riskier currencies against the dollar after the release of June minutes from the Federal Reserve, which suggested growth in the world's largest economy would have to worsen for the central bank to launch more quantitative easing.
Asset buying from the Fed tends to weigh on the greenback against other currencies as it increases the supply of dollars in the system. The euro also softened across the board as investors continued to fret about Europe's progress in addressing the region's debt crisis.
Comments
Comments are closed.