By Peter Nurse
Investing.com - The U.S. dollar edged lower in early European trade Thursday, consolidating after gains overnight in the wake of an onslaught of dire economic data. Sterling has shown strength after the Bank of England remained on hold.
At 3:15 AM ET (0715 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 100.023, down 0.1%, while EUR/USD rose 0.2% to 1.0812. USD/JPY gained 0.2% to 106.31.
The U.S. dollar had pushed higher overnight after economic data showed that private employers laid off a record 20.2 million workers in April.
Analysts predict another 3 million Americans claimed unemployment benefits over the past week, with this data due later Thursday.
Sterling recovered from a two-week low against the dollar after members of the Bank of England’s Monetary Policy Committee decided unanimously to keep interest rates at 0.1% and opted by a 7-to-2 margin to hold its quantitative easing program at £200 billion.
At 3:20 AM ET, GBP/USD pushed 0.6% higher to 1.2410.
The central bank had been widely expected to keep rates on hold, but some economists had thought the MPC may tweak its bond-purchasing program - in the end two members voted for a £100 billion increase.
The publication of a briefing with BOE Governor Andrew Bailey will follow later Thursday.
Elsewhere, the Turkish lira fell to a record low earlier Thursday, as investors worried about the fallout from the coronavirus pandemic, falling below the record low of 7.24 per dollar hit during the country's last major bout of currency turmoil back in August 2018.
The lira has fallen more than 16% this year, and with no Fed swap line and depleting FX reserves, it’s difficult to see upside for the currency.
At 03:20 AM ET, USD/TRY traded 0.3% higher at 7.2230, having earlier risen to 7.2520.
On the flip side, the USD/CNY pair lost 0.1% to 7.0979 after China's exports unexpectedly rose in April 3.5% from a year earlier, marking the first positive growth since December last year, customs data showed on Thursday.
Later Thursday, the Norwegian central bank meets later Thursday, and is widely expected to stay on hold today, keeping the sight deposit rate at 0.25%.
“Relative to its most recent economic projections from 13 March, the Norges Bank has already reacted to the deteriorated outlook by cutting rates by an additional 75bp on 20 March,” said Danske Bank, in a research note.
At 03:20 AM ET, USD/NOK traded 0.6% lower at 10.2254.