On Thursday, the pound continued its decline against the dollar, hovering around eight-month low, as worries stemming from theU.S.and the current sluggish growth pace worldwide sparked demand on low-yielding currencies.
The Fed Chairman, Ben Bernanke, said there are “significant downside risks” to the economic outlook of theU.S.and said the Fed would sell $400 billion of short-term securities and buy an equivalent amount of long-term securities to reinvigorate the economy. Bernanke’s announcements were translated negatively by investors, pushing demand on the dollar.
In addition, manufacturing and services data from the euro area showed contraction in the two key sectors while U.S. jobless claims showed a rise, adding to signs that the sluggish growth pace is counting.
On the other hand, the latest comments by the BoE referred to the need of buying more bonds and keepingU.K.interest rate at its low level to spur the weak recovery.
On Friday, U.K. BBA loans for house purchase for the month of August will be released at 08:30 GMT, while the U.S. lacks economic fundamentals.
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