Daily Currency Report
Overview
The US dollar weakened against both the pound and the yen as the American CPI figures matched market expectations. Oil prices also fell back but held at $62 a barrel, as concerns linger over more militant attacks on pipelines in Nigeria.
GBP
The sterling posted moderate gains against both the US dollar and the euro following the release of the Bank of England's minutes. The minutes showed that eight of its nine-strong Monetary Policy Committee voted to keep rates on hold.
USD
The dollar slipped against the yen. The US consumer prices data did little to alter expectations that the Federal Reserve will keep raising interest rates. The data was also said to be supportive of market expectations for two more rate increases in the coming months.
EUR
Speculation continues to grow among traders that the European Central Bank is set to raise the base level of interest next month following strong Belgian and Italian producer sentiment surveys. Also, the Swedish Central Bank raised their own interest rates by 25 basis points to two per cent. The central bank went on to comment that the pace of future hikes is likely to be slow.
JPY
The yen rose overnight after the governor of the Bank of Japan reiterated the central bank would eventually raise interest rates, re-igniting worries that the dollar's yield advantage will erode this year.