Forex – Dollar Comes Off Day’s Highs as Sterling Jumps

© Reuters. Dollar comes off day’s highs as sterling jumps – The U.S. dollar pulled back from two-week highs against a basket of the other major currencies on Thursday as sterling rose by more than a cent following an unexpectedly hawkish rate announcement from the Bank of England.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.18% to 90.00 by 09:06 AM ET (14:06 AM GMT), off an earlier high of 90.27.

The pound rallied, with surging 1.17% to 1.4036 after the than investors are currently anticipating after its policy meeting on Thursday.

The BoE also raised its growth forecasts, saying that it now expects the British economy will expand faster than expected this year and in 2019.

The dollar rose to fresh two-week highs against a currency basket earlier Thursday, building on strong gains in the previous session after U.S. Senate leaders announced a two-year budget agreement.

U.S. congressional leaders on Wednesday reached a to raise government spending by almost $300 billion. The budget agreement averted the risk of a government shutdown or a debt default.

on the proposed budget deal later on Thursday.

The gains in the dollar were a continuation of the increases that came amid the sharp drop in stock prices on Friday and on Monday, which saw the Dow Jones Industrial Average record its biggest single-day point decline on record.

The downturn in the equity market was triggered after strong U.S. wage growth data prompted expectations that the Federal Reserve may interest rates at a faster pace that had previously been expected.

Data on Thursday showed that unexpectedly fell to an almost 45-year low last week as the labor market continued to tighten, bolstering the outlook for faster wage growth this year.

The euro pushed higher against the dollar, with edging up 0.13% to 1.2278, still not far from an overnight low of 1.2245, which was the weakest level since January 23.

The dollar was higher against the yen, with rising 0.19% to 109.57.

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