Dollar adrift ahead of US inflation test; sterling firms
dollar fell a touch on Thursday although moves were largely subdued ahead of a U.S. inflation report due later in the day, while sterling firmed on receding expectations for an August rate cut from the Bank of England (BoE).
The British pound rose to a one-month high of $1.28545 in early Asia trade, extending a 0.48% gain from the previous session after comments from BoE policymakers caused markets to scale back bets for an easing cycle to begin next month.
BoE Chief Economist Huw Pill on Wednesday said price pressures in Britain's economy were persistent and that the timing of a first rate cut was an «open question». His colleague Catherine Mann signalled she is unlikely to vote for an interest rate cut in August.
«Ahead of BoE's 1 August meeting, the Monetary Policy Committee (MPC) will have only one more set of data,» ANZ analysts said in a note.
«One set of data is unlikely to be sufficient for the MPC to be able to gain confidence on the path of inflation, and the MPC may lean in favour of waiting for more data. Our view is as data improves over summer, the MPC will have greater confidence to cut rates in September.»
In the broader market, the dollar was on the back foot, though currencies were mostly trading sideways as investors were hesitant to take on fresh positions ahead of the U.S. inflation report.
Against the greenback, the euro gained 0.04% to $1.0834, and the Aussie dollar rose 0.01% to $0.6754.
The dollar was little changed at 104.95 against a basket of currencies.
Expectations are for core
