Euro, pound drop on interest rate decisions

The euro and the pound both declined versus the US dollar on Thursday after the Bank of England’s Monetary Policy Committee cut the UK interest rate to 5.25 percent and the European Central Bank held Eurozone rates steady at 4 percent but left the way open for rate cuts in the future.

The dollar traded at $1.9463 to the pound in mid-afternoon trade in London and had gained further, to $1.9404 to the pound by just after 1 p.m. in New York, while the greenback was at $1.4472 to the euro in early afternoon trade in New York.

Elsewhere, the Canadian dollar dropped to $1.0090 to the US dollar as forex traders sold currencies related to commodities exporters as economic worries led to fears that demand for commodities will decline.

The South African rand also weakened as it dropped to a 16-month low versus the US dollar as investors worried that economic growth in that African nation will slow due to high interest rates and power shortages.

The rand dropped to as low as R7.8639 to the dollar during the Johannesburg session but had come back to R7.6815 to the dollar by after 1 p.m. in New York.

Story link: Euro, pound drop on interest rate decisions