The yen jumped 0.53% against the dollar to 108.98. Sentiment on the yen remained fragile, since the Japanese Prime Minister stated that the government is prepared to intervene in the foreign exchange market if the yen appreciates further. Nevertheless, the BoJ Governor Harukiko Kuroda said earlier today that it would be difficult for the finance ministry to weaken the currency in order to boost exports.
The euro held steady against the greenback at 1.1421, while the sterling was little changed at 1.4437, ahead of the Bank of England’s policy decision on monetary policy, scheduled later in the day. The U.S. dollar index rose 0.11% to 93.90.
Overnight, the euro rose sharply against the dollar halting a six-day losing streak, as the greenback pull backed from two-week highs in a subdued trading day, ahead of the BoE’s quarterly inflation report. EUR/USD went up 0.47% to 1.1425.
The sterling edged higher 0.05% against the dollar to 1.4449. Earlier on Wednesday, a report from the U.K. Office for National Statistics showed that manufacturing production rose by 0.1% in March, below expectations for a 0.3% rise and following a decrease of 0.9% in February. In addition, the data revealed that industrial production rose by 0.3%, disappointing forecasts for a 0.5% rise and following a decline of 0.2% a month before.
Meanwhile, the dollar fell 0.66% against the yen, retreating from Tuesday’s highs of 109.36 and was lower against the Swiss franc, with USD/CHF falling 0.44% to 0.9726.
Elsewhere, the Australian, New Zealand and Canadian dollars gained ground against their U.S. counterpart, with AUD/USD rising 0.19% at 0.7376, NZD/USD advancing 0.65% to 0.6807 and with USD/CAD falling 0.18% o 1.2888. The commodity-related currencies strengthened as oil prices rebounded on Wednesday, ahead of the weekly report on U.S. stockpiles.
The highlight of the day today is Bank of England’s monetary policy decision. The BoE is due to release its first quarterly inflation report since February. With the Brexit debate raging, changes are that the central bank could leave its benchmark interest day unchanged at 0.5 for this year, even as inflation remains persistently below the 2% target, while downgrading growth forecasts.
Since the last inflation report, the pound has weakened, hourly earnings have been muted and the gross domestic product forecasts for the second quarter have been lowered to 0.5%. The press conference by the BoE Governor Mark Carney will be highly anticipated for fresh signals on the bank’s future policy moves.
Furthermore, investors will also be looking at the U.S. initial jobless claims, with the number of people applying for unemployment benefits expected to have fallen to 270,000 from 274,000 in the previous reading.