FX Roundup: Pound slides as yen, dollar tick higher

The pound sterling took another beating versus the greenback on Friday, while the yen continued to strengthen.

At 1617 GMT, the pound was down a further 0.87% versus the dollar changing hands at $1.4287 on ‘Brexit’ risk trades and fears of a cooling economy. Overnight, the Bank of England voted 8-1 to keep interest rates unchanged at 0.5%. The UK central bank’s Monetary Policy Committee also said it would hold its asset purchase programme at £375bn, as expected by analysts.

In the wider market, the dollar was down 1.02% against the yen changing hands at JPY116.88, while the euro rose 0.04% against the greenback exchanging at $1.0946. Continuing with major crosses, the dollar also fell 0.55% against the Swiss franc changing hands at CHF0.9996.

Kit Juckes, head of forex at Societe Generale, said, “The dollar and yen remain the biggest longs complemented by a long in EUR. The most sizeable shorts are in CAD, GBP and NZD. The short position in GBP/USD and the long position in USD/CAD are the dollar crosses with the strongest combined momentum.”

Jane Foley, senior FX strategist at Rabobank, added: “Heightened levels of volatility are likely to keep EUR/USD well supported near term. We see potential for a move lower in EUR/USD this year though this assumes some recovery in risk appetite. We expect EUR/USD 1.04 to offer strong support.”

Meanwhile, major commodity linked currencies took a hammering as US oil futures slipped below the $30 per barrel support level. The greenback rose 1.01% versus the Canadian dollar changing hands at $1.4511, while the Australian dollar slid 1.56% against its US counterpart exchanging at US$0.6876.

The New Zealand dollar also fell by 0.65% exchanging at US$0.6432. Finally, in Latin America, the dollar spiked against major regional crosses, including the Colombian (up 1.91%), Mexican (up 1.80%) and Chilean (up 1.91%) pesos, and the Brazilian real (up 1.24%).