© Reuters. The dollar hits a peak, the book moves back to the BoE
Investing.com – The dollar has reached annual highs against a basket of currencies on Thursday, while the pound declined to a seven-month low in view of the conclusion of the monetary policy meeting of the Bank of England later in the day.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.38% to 91,14 at 06:18 AM (10:18 AM GMT), a level that had not been reached since July of 2017.
The demand for the dollar was supported after the federal Reserve chairman, Jerome Powell, has reiterated on Wednesday that the arguments in favour of a gradual rise in rates remain strong.
The dollar has also been supported as risk aversion arising from escalating trade dispute between the United States and China has eased.
The u.s. currency was little changed against the yen and the refuge, with the USD / JPY to 110,37, a higher previous 110,76,
The dollar has lost all of the gains of the day against the yen, while yields on Italian bonds soared after the two legislators eurosceptics have been appointed to the head of the main committees, the economic of the Italian parliament.
This decision has reinforced the future program of the future government to leave the euro zone.
The euro has extended its losses, with the EUR / USD down 0.44% to 1,1525.
The pound fell against the dollar, with a decline of 0.47% to 1,3109 to achieve either the lowest level since mid-November.
The BoE is expected to leave interest rates unchanged later on Thursday, in light of recent mixed economic data and the ongoing discussions on the Brexit.
Investors are wondering if the bank will offer guidance on the likelihood of a rate hike at its next meeting in August.
The british pound has ignored the data showing that borrowing by the british government fell last month, while the deficit of the previous year has been revised downward.