Home Forex The Dollar Sips, The Sterling Climbs Ahead of BoE Meeting

The Dollar Sips, The Sterling Climbs Ahead of BoE Meeting

signs of some currencies: yuan dollar yen and Australian dollar

The dollar was lower against a basket of major currencies on Thursday after the Bank of Japan and the U.S. Federal Reserve both made the decision to hold rates. Mounting fears of a potential Brexit continued to wane on market sentiment.

Bank of Japan officials voted to maintain its monetary policy at a rate of 80 billion yen. The bank highlighted the June 23 referendum and Europe’s “debt problem” as potential threats to Japan’s economy.

The BoJ’s decision came shortly after the Federal Reserve cited the referendum as a factor in its decision to hold rates.

The dollar weakened shortly after the Fed made its announcement and lowered its rate hike forecast for the next few years.

USD/JPY plunged 1.6% to 104.30, its lowest level in two years. EUR/USD was virtually unchanged at 1.1255.

The market is also awaiting the Bank of England’s policy decision, which is expected later today. While no monetary policy changes are expected, investors will be looking for insight into the potential risks of the referendum next week.

The pound trimmed earlier losses against the dollar, as new data showed a spike in U.K. retail sales last month.

The pound was at 1.4162 against the dollar, up from its low of 1.4121 earlier in the session. The sterling slid against the euro, with EUR/GBP at 0.7947.

The Office for National Statistics announced that retail sales in the U.K. rose 6% in May compared to last year. Economists had projected a 3.9% increase.

Retail sales data from April was also revised up from 4.3% to 5.2%.

The data comes as a fresh opinion poll shows the “Leave” campaign ahead of the “Remain” campaign a little over a week before the Brexit referendum.

The poll from IPSOS MORI showed that 47% were in favor of remaining in the EU, while 53% were in favor of leaving.