Investing.com - Sterling weakened across the board and the dollar gained on Thursday after the Bank of England cut interest rates to record lows and stepped up stimulus measures in the wake of the U.K. Brexit vote.
GBP/USD dropped 1.13% to 1.3174 from around 1.3326 ahead of the decision.
The BoE cut interest rates to a record-low 0.25% in a bid to buffer the economy from a downturn following the June 23 vote to exit the European Union.
The central bank also boosted its quantitative easing program by £60 billion and slashed its growth forecast for next year.
It now expects growth of just 0.8% in 2017, down from 2.3% in its May forecasts.
Sterling also slumped against the euro, with EUR/GBP advancing 0.98% to 0.8449 from 0.8355 earlier.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.19% to 95.67 following the BoE decision.
The euro dipped against the dollar, with EUR/USD easing 0.10% to 1.1136.
The yen was steady near five-week highs against the greenback, with USD/JPY at 101.22.
The dollar has come under pressure amid diminished expectations for another rate hike by the Federal Reserve this year after last week’s surprisingly weak data on U.S. second quarter growth.
The U.S. central bank hiked rates for the first time in almost a decade in December.
The dollar found some support after Wednesday’s better-than-expected data on U.S. private sector hiring.
Payroll processor ADP said the private sector added 179,000 jobs last month, surpassing economists’ expectations for an increase of 170,000.
While not viewed as a reliable guide for the closely watched U.S. nonfarm payrolls report due to be released on Friday, it does give guidance on private-sector hiring.
Data on Thursday showed that the number of Americans filing claims for unemployment assistance rose slightly last week, but remained in territory consistent with a solid labor market.
The Labor Department said initial jobless claims increased by 3,000 to 269,000 from the previous week’s total of 266,000. Analysts expected jobless claims to decline by 1,000 to 265,000 last week.