FX round-up: Sterling suffers as market watches for a BoJ policy 'bazooka'

Sterling endured a torrid time on most of its major crosses on Thursday as post-Brexit vote uncertainty appeared to cripple its prospects once again, and traders looked warily ahead to Bank of Japan (BoJ) policy decision due Friday.

At about 17:25 BST, sterling was down 0.65% to $1.3137, and was lower 0.88% to €1.1852. The dollar-spot index was down 0.45% to $96.614. Gold rose 0.34% to $1,331.20 an ounce.

"It feels like everything thrown at the sterling which should elevate its value is swiftly erased by the persistent post-Brexit uncertainty," said FXTM Research analyst Lukman Otunuga.

This continued to haunt investor attraction to the unit, and short-term greenback weakness had in fact done little to buoy the cable. The pair was expected to fall further as market expectations for a Bank of England rate cut heightened.

"From a technical standpoint, the GBPUSD is bearish and a sharp decisive breach below $1.3100 could open a path towards $1.2800," said Otunuga in a statement.

Sterling dived lower against the loonie, aussie, kiwi and more so the rand, and fell 1.11% to 137.824 yen as BoJ's policy makers meet. A decision from the central bank is due on Friday, and some are expecting it to produce a policy "bazooka," as Otunuga put it succinctly on Wednesday.

The yen gained against each of the cable's two components on Wednesday after Japan's PM, Shinzo Abe, promised a 28-trillion-yen stimulus package.

Additional monetary policy from BoJ on Friday to stablise Japan's economy was seen potentially yen-weakening.

Meantime, the dollar was widely lower, after the US Federal Reserve held its key interest rate overnight on Wednesday, but left the door open to a possible rise later in 2016.

The Federal Open Market Committee's hawkish leaning statement had bolstered sentiment towards the dollar, but many traders agreed much depended on the detail of upcoming economic data, non-farm payrolls in particular.

At about 17:25 BST, the dollar was down 0.21% to €0.9024, and slipped lower versus the loonie, aussie and rand, but made minor gains on the kiwi. It was down 0.46% to 104.91 yen.