FX round-up: Sterling lifted by unemployment data

Date: Thursday 18 Mar 2010

The dollar came under pressure as the Federal Reserve and Bank of Japan’s decision to maintain ultra low interest rates sparked interest in higher risk, higher yielding currencies.

The dollar index, which measures the US currency against a basket of six others, hit a six-week low of 79.507 before recovering to 79.734 later in the session.

Sterling marked broad gains after a report showed better than expected employment data. The unemployment rate recorded its sharpest decline in 13 years to 4.9%. Economists had pencilled in a rate of 5.0%. The pound rose 0.6% to $1.5315.

Gains for the euro were short lived as investors continue to try and assess potential bail-out plans for Greece. The euro fell 0.7% against the pound.

The dollar rose against the yen as the Bank of Japan maintained interest rates at 0.1% and outlined plans to double its lending programme, which it first introduced in December.

The dollar touched a high of 90.69 yen, before settling around 90.26 yen in late afternoon trading.

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