Currency trading slow on interest rate expectations

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Currencies trading was slow in much of the world on Thursday as investors waited for word on whether the US Federal Reserve would raise US interest rates yet again as expected.

The yen was down ¥0.3 to ¥110.65 against the US dollar on figures showing that in the week ending June 24, Japanese investors bought ¥1,770 billion in foreign bonds.

This was the highest weekly outflow since September of last year.

Sterling was down against several currencies in reaction to several bits of bad economic news out of the UK. The British currency fell 1.4 cents to $1.7933 against the US dollar.

Sterling was also down 0.4p to £0.6717 in relation to the euro, declined by ¥1.1 to ¥198.37 against the yen, and declined 1.1 centimes to SFr2.3044 against the Swiss franc.

Among the bad news was data showing that first quarter economic growth in the UK had been revised downward to 0.4 percent on a quarter-to-quarter basis.

The annual growth of the gross domestic product also was revised downward, from 2.7 percent to 2.1 percent.

Analysts contend that these figures make it more likely than ever that UK interest rates will be cut in August as the risks of inflation subside.

And, in fact, the annual inflation rate fell to 4.1 percent with the decline of seasonally adjusted house prices by 0.2 percent in June.

In addition, the current account deficit was up to 2 percent of the gross domestic product in the first quarter of this year, up from 1.4 percent in the previous quarter.