Sterling, US dollar both weaker

Story link: Sterling, US dollar both weaker

Sterling weakened on Thursday after the Bank of England’s Monetary Policy Committee decided to leave interest rates in the UK on hold for at least another month. Most analysts, however, believe that the Bank will have to raise rates in May, from the current 5.25 percent to 5.5 percent. Also hurting the UK currency was new data that showed industrial production in the UK was down by 0.6 percent in February. A gain of 0.2 percent had been expected.

The pound dropped 0.3 percent to $1.9710 in relation to the US dollar, while it fell by 0.7 percent to £0.6810 versus the euro.

The greenback was weaker as well, ahead of Friday’s new employment numbers. If fewer jobs were created last month than were anticipated, it could mean the Federal Reserve could feel that it has to reduce interest rates soon. The dollar was slightly lower against the yen to ¥118.65, while it fell 0.4 percent to $1.3426 in relation to the euro.