FX Roundup: Pound slides as yen, dollar tick higher

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%).