Sterling weakens on BofE minutes, remarks

Story link: Sterling weakens on BofE minutes, remarks

The yen had saw a turbulent week this week, sinking to multi-year lows against the US dollar, Australian dollar and sterling, while hitting another all-time low versus the euro before gaining against all but the US dollar by the end of the week despite declines on Friday. The Japanese currency was helped late in the week by weak inflation in Australia, while mid-week reports that the yen’s weakness would be a topic of conversation at February’s G7 meeting helped it versus the euro. Denials of that report on Thursday and lowered expectations for an interest rate increase next month led to new weakness.

By the end of the week, the yen ended up 0.2 percent lower versus the US dollar to ¥121.50, but higher against the euro, Australian dollar, and sterling. The Japanese currency added 0.3 percent over the week to ¥156.80 in relation to the euro, was up 0.5 percent to ¥238 against sterling, and gained 1.9 percent versus the Australian dollar, to ¥93.90.

Sterling, meanwhile, hit a 14-year high versus the greenback and a four-year high in relation to the euro early in the week before a speech by the governor of the Bank of England in which he said that inflation was likely to fall, “possibly quite sharply” after the middle of the year, and after the minutes of the last Monetary Policy Committee meeting were released. The minutes showed that the decision to raise interest rates at the meeting was 5 to 4 instead of the 7 to 2 majority that had been expected. By the end of the week, sterling was 0.7 percent lower to $1.9600 versus the US dollar and had fallen 0.3 percent over the week to £0.6585 versus the euro.