The British pound was weaker Tuesday after Bank of England Governor Mervyn King said that the Bank could soon cut the rate paid for the Bank of hold reserves.
Banks are now paid 0.5 percent on deposits of their reserves held by the Bank.
The pound traded at 88.89p to the shared currency in afternoon trade in New York, while it took $1.6403 to buy a pound.
At the same time, the Japanese yen weakened as good news from US retailers spurred investors to look for riskier investments among higher-yielding currencies.
US retail sales added 2.7 percent in August.
Excluding auto sales, retail sales were still up 1.1 percent in the month.
In afternoon trade in New York, the yen traded at ¥90.955 to the US dollar and at ¥133.1893 to the euro, while it took $1.4643 to buy a euro.
The news that US retail sales had gone up so much in August helped the Canadian dollar gain on its US counterpart as it traded at C$1.0736 to the greenback during the afternoon session in New York.