Dollar Strengthens As Bank Of England Signals No Rate Hike Till 2015
Washington (August 13) The dollar rallied to its highest since June versus the sterling and held recent gains against the euro after the Bank of England signaled it would hold off on hiking interests.
The BoE said it will hike rates rates early in 2015, but only if wage growth in the UK picks up. From there, any interest rate hike will be only gradual.
The dollar rose to USD1.6690 versus the sterling, emerging from this week's tight trading range.
The UK unemployment rate continued to fall as expected by economists, hitting the lowest since late 2008, data from the Office for National Statistics revealed.
Markets also weighed a flurry of economic data from the euro zone.
A leading economic indicator for the German economy declined in June after increasing in recent months, the Conference Board reported. The Conference Board leading economic index fell 0.1% month-on-month in June, reversing the revised 0.1% increase in May.
Meanwhile, German inflation eased as estimated to its lowest level since early 2010, final data from Destatis showed.
Eurozone industrial production declined for the second straight month in June, figures from Eurostat showed. On a monthly basis, industrial production dropped 0.3%.
The dollar held at USD1.3370 versus the euro near its recent 9-month highs.
Modest gains took the dollar to Y102.50 versus the yen, but the pair remains little changed from the start of the year.