Investing.com - The dollar hit six-month highs against the broadly weaker pound on Wednesday after the Bank of England said inflation would remain above target until early 2016 and moved higher against the yen ahead of a G20 meeting later in the week.
During European late morning trade, the dollar hit the highest level since early August against the pound, with USD/GBP falling 0.63% to 1.5562.
Sterling weakened broadly after the BoE said inflation is likely to be at around 2.3% in two years’ time, sharply higher than the 1.8% forecast in November, before falling back below the bank’s 2% target in the first quarter of 2016.
The bank said that economic growth was likely to remain below its pre-crisis levels until 2015 and that it stood ready to provide more stimulus to bolster the recovery.
Elsewhere, the dollar turned higher against the yen, with USD/JPY rising 0.16% to 93.60.
Investors remained cautious ahead of a meeting of finance ministers from the G20 group later in the week, after a statement by the G7 on Tuesday reaffirmed a commitment to market-determined exchange rates.
Investors were also wary ahead of the outcome of the Bank of Japan’s policy meeting on Thursday although the bank was widely expected to hold off from announcing any changes to monetary policy before a new governor is appointed.
The dollar was lower against the euro, with EUR/USD rising 0.26% to 1.3487.
In the euro zone, official data showed that industrial production rose 0.7% in December, beating expectations for a 0.2% increase, but the previous months figure was revised down to a 0.7% decline from a previously reported drop of 0.3%.
Elsewhere, the greenback was almost unchanged against the Swiss franc, with USD/CHF dipping 0.01% to 0.9171.
The Swiss franc showed little reaction after official data showed that domestic producer price inflation fell 0.1% in January, compared to expectations for a 0.3% increase.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.10% to 1.0032, AUD/USD climbing 0.22% to 1.0329 and NZD/USD inching up 0.05% to 0.8409.
The Australian dollar found support after a domestic index of consumer sentiment climbed sharply in January, indicating that a series of interest rate cuts are supporting confidence in the economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.10% to 80.03.
The U.S. was to release official data on retail sales later in the trading day.
During European late morning trade, the dollar hit the highest level since early August against the pound, with USD/GBP falling 0.63% to 1.5562.
Sterling weakened broadly after the BoE said inflation is likely to be at around 2.3% in two years’ time, sharply higher than the 1.8% forecast in November, before falling back below the bank’s 2% target in the first quarter of 2016.
The bank said that economic growth was likely to remain below its pre-crisis levels until 2015 and that it stood ready to provide more stimulus to bolster the recovery.
Elsewhere, the dollar turned higher against the yen, with USD/JPY rising 0.16% to 93.60.
Investors remained cautious ahead of a meeting of finance ministers from the G20 group later in the week, after a statement by the G7 on Tuesday reaffirmed a commitment to market-determined exchange rates.
Investors were also wary ahead of the outcome of the Bank of Japan’s policy meeting on Thursday although the bank was widely expected to hold off from announcing any changes to monetary policy before a new governor is appointed.
The dollar was lower against the euro, with EUR/USD rising 0.26% to 1.3487.
In the euro zone, official data showed that industrial production rose 0.7% in December, beating expectations for a 0.2% increase, but the previous months figure was revised down to a 0.7% decline from a previously reported drop of 0.3%.
Elsewhere, the greenback was almost unchanged against the Swiss franc, with USD/CHF dipping 0.01% to 0.9171.
The Swiss franc showed little reaction after official data showed that domestic producer price inflation fell 0.1% in January, compared to expectations for a 0.3% increase.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.10% to 1.0032, AUD/USD climbing 0.22% to 1.0329 and NZD/USD inching up 0.05% to 0.8409.
The Australian dollar found support after a domestic index of consumer sentiment climbed sharply in January, indicating that a series of interest rate cuts are supporting confidence in the economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.10% to 80.03.
The U.S. was to release official data on retail sales later in the trading day.