Investing.com - The dollar rose to session highs against the euro on Wednesday following comments by a European Central Bank policymaker, while the pound remained higher after the Bank of England’s inflation report and upbeat U.K. jobs data.
During U.S. morning trade, EUR/USD slid 0.24% to 1.3402 after an ECB policymaker said that negative interest rates or asset purchases were options the bank could use to reach its inflation target.
ECB executive board member Peter Praet told the Wall Street Journal said the bank could cut deposit rates to below zero and undertake asset purchases to lift inflation closer to its target of just below 2%.
The comments came amid fears over growing deflationary pressures in the euro area. The annual rate of euro zone inflation fell to a four-year low of 0.7% in October, prompting the ECB to cut rates to a record low 0.25% last Thursday.
The dollar was close to session lows against the pound, with GBP/USD advancing 0.56% to 1.5991
Sterling strengthened after the BoE brought forward the date it expects the unemployment rate to hit the 7% threshold at which it will consider raising rates and revised up its forecast for growth in its quarterly inflation report.
The BoE said the unemployment rate will fall faster than it expected three months ago. BoE Governor Mark Carney said there is a "two in five chance" that it could be 7% at the end of 2014.
The bank reiterated that the unemployment rate falling below 7% would not automatically trigger an increase in interest rates.
The BoE said it now expects economic growth of 1.6% this year, up from 1.4% in August and growth of 2.8% in 2014, up from 2.5%. The bank still expects growth of 2.3% in 2015.
The pound received an additional boost after official data on Wednesday showed that the number of people claiming unemployment benefits in the U.K. fell more than expected in October and the U.K. unemployment rate ticked down to a more than three-year low of 7.6% in the three months to September.
The dollar eased against the yen, with USD/JPY slipping 0.21% to 99.42, just below the two month high of 99.79 struck on Tuesday.
Demand for the dollar continued to be underpinned after last week’s stronger than forecast U.S. nonfarm payrolls report prompted investors to bring forward expectations for a reduction in the Federal Reserve’s USD85 billion-a-month asset purchase program.
Investors were turning their attention to Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve, for indications on the future course of U.S. monetary policy.
The dollar pushed higher against the Swiss franc, USD/CHF rising 0.15% to 0.9186.
The greenback was mixed to lower against the Australian, New Zealand and Canadian dollars, with AUD/USD edging up 0.02% to 0.9302, NZD/USD rising 0.27% to 0.8243 and USD/CAD dipping 0.11% to 1.0481.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.01% to 81.22.
During U.S. morning trade, EUR/USD slid 0.24% to 1.3402 after an ECB policymaker said that negative interest rates or asset purchases were options the bank could use to reach its inflation target.
ECB executive board member Peter Praet told the Wall Street Journal said the bank could cut deposit rates to below zero and undertake asset purchases to lift inflation closer to its target of just below 2%.
The comments came amid fears over growing deflationary pressures in the euro area. The annual rate of euro zone inflation fell to a four-year low of 0.7% in October, prompting the ECB to cut rates to a record low 0.25% last Thursday.
The dollar was close to session lows against the pound, with GBP/USD advancing 0.56% to 1.5991
Sterling strengthened after the BoE brought forward the date it expects the unemployment rate to hit the 7% threshold at which it will consider raising rates and revised up its forecast for growth in its quarterly inflation report.
The BoE said the unemployment rate will fall faster than it expected three months ago. BoE Governor Mark Carney said there is a "two in five chance" that it could be 7% at the end of 2014.
The bank reiterated that the unemployment rate falling below 7% would not automatically trigger an increase in interest rates.
The BoE said it now expects economic growth of 1.6% this year, up from 1.4% in August and growth of 2.8% in 2014, up from 2.5%. The bank still expects growth of 2.3% in 2015.
The pound received an additional boost after official data on Wednesday showed that the number of people claiming unemployment benefits in the U.K. fell more than expected in October and the U.K. unemployment rate ticked down to a more than three-year low of 7.6% in the three months to September.
The dollar eased against the yen, with USD/JPY slipping 0.21% to 99.42, just below the two month high of 99.79 struck on Tuesday.
Demand for the dollar continued to be underpinned after last week’s stronger than forecast U.S. nonfarm payrolls report prompted investors to bring forward expectations for a reduction in the Federal Reserve’s USD85 billion-a-month asset purchase program.
Investors were turning their attention to Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve, for indications on the future course of U.S. monetary policy.
The dollar pushed higher against the Swiss franc, USD/CHF rising 0.15% to 0.9186.
The greenback was mixed to lower against the Australian, New Zealand and Canadian dollars, with AUD/USD edging up 0.02% to 0.9302, NZD/USD rising 0.27% to 0.8243 and USD/CAD dipping 0.11% to 1.0481.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.01% to 81.22.