The dollar was little changed against the other major currencies on Thursday, as investors awaited the release of U.S. jobs data later in the day after the minutes of the Federal Reserve’s most recent policy meeting put an end to near-term rate hike speculation.
GBP/USD gained 0.43% to 1.2985, off the previous session’s fresh 31-year lows of 1.2797.
The pound bouced back up after the U.K. Office for National Statistics said on Thursday that manufacturing production decreased by 0.5% in May, better than expectations for a decline of 1.0%.
On an annualized basis, manufacturing production rose at rate of 1.7%, better than forecasts for a 0.7% increase.
The report also showed that industrial production decreased by 0.5%, better than forecasts for a 1.0% decline. Year-on-year, industrial production increased 1.4% in May, exceeding expectations for a 0.5% rise.
The pound had dropped to fresh 31-year lows against the greenback on Wednesday, as Britain’s shock decision to leave the European Union continued to fuel uncertainty over the consequences of the U.K. vote on the country’s economy.
Investors were now looking ahead to the Bank of England’s policy meeting next week, after BoE Governor Mark Carney signaled last week that more stimulus may be needed over the summer, sparking expectations for an upcoming rate cut.
Meanwhile, the sentiment on the greenback mildly weakened after the minutes of the Fed’s June policy meeting released on Wednesday showed that policymakers decided to keep interest rate hikes on hold as they assessed the Brexit impact.
Fed officials agreed that it was “prudent to wait” for additional data before considering another rate hike, according to minutes.
EUR/USD slipped 0.14% to 1.1083, while EUR/GBP dropped 0.54% to trade at 0.8539, off Wednesday’s a 35-month high of 0.8628.
Market participants were also eyeing the minutes of the European Central Bank’s latest policy meeting, due later in the session for potential hints on the central bank’s post-Brexit policy moves.
USD/JPY slid 0.38% to 100.94, while USD/CHF added 0.19% to 0.9768.
Earlier Thursday, Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to expand monetary stimulus further if needed to achieve its 2% inflation target and affirmed his confidence over Japan's recovery prospects, making no mention of the current Brexit turmoil.
The Australian dollar was steady, with AUD/USD at 0.7526, while NZD/USD rallied 1.21% to 0.7218.
Investors remained cautious with the Aussie after Standard and Poor's downgraded the outlook on Australia's AAA credit rating from stable to negative earlier Thursday.
The ratings agency cited political uncertainty following last Saturday's inconclusive elections as a possible threat to Australia's rating in the future.
Elsewhere, USD/CAD edged down 0.19% to trade at 1.2936.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 96.10.