Market News
Yen hits 8-week high, sterling drops after Bank of England rate cut - REUTERS
By Hannah Lang
Summary
- Sterling slips after Bank of England rate cut
- Yen pares gains after hitting 8-week high versus dollar
- Dollar slightly higher, but still near recent lows
NEW YORK, Feb 6 (Reuters) - The yen touched an eight-week high versus the dollar on Thursday after a Bank of Japan policy board member advocated continued interest rate hikes, while sterling slid as the Bank of England cut rates.
The pound fell sharply after the Bank of England cut interest rates as expected, but forecast higher inflation and weaker growth, with two officials calling for an even larger rate cut.
Sterling later pared some of those losses, having touched a one-month high on Wednesday. It was last down 0.54% at $1.2438.
Money markets now price in around 67 basis points of further BoE easing by the end of the year.
"The pound's losses may prove somewhat limited: the services-driven British economy is largely sheltered against trade war risks," Karl Schamotta, chief market strategist with payments company Corpay in Toronto, said in a research note.
