The British pound rebounded from lows on Wednesday after the parliamentary debate, which opened the door for another delay with Brexit, while the dollar fell after weak manufacturing data fueled rates to aggressively weaken US monetary policy.
The pound, which reached an almost three-year low yesterday, rose by almost 0.2% against the dollar to $ 1.2100 and strengthened by 0.1% against the euro.
Economists believe the British currency was a little perk after British lawmakers voted to challenge Prime Minister Boris Johnson and include on the parliament’s agenda a proposal to delay Britain's exit from the European Union after October.
On Tuesday, the pound fell below $ 1.20 and reached its minimum since the sudden collapse in October 2016. Despite today's growth, the outlook for the British currency is still rather cloudy. Johnson said he will now insist on early elections, which will add another important source of uncertainty.
The US dollar moved away from the two-year high reached on Wednesday against a basket of currencies, trading at 98.915, losing to the yuan and strengthening against the euro to 1.0975.
According to the Institute for Supply Management, the rollback of the dollar was caused by the manufacturing activity of the world's largest economy, which contracted for the first time in three years last month.
This knocked the momentum out of the previously rising dollar and rallied the bond market as investors raised rates by a couple more cuts in the Federal Reserve interest rate before Christmas.
US 10-year benchmark Treasury yields fell to their lowest level in two years.
The decline in the dollar helped the Australian dollar. The June economic growth figures were weak, nevertheless, they were in line with forecasts, and the currency grew by 0.3%, reaching a weekly high of $ 0.6775.
The Japanese yen weakened slightly to the level of 106.11 per dollar after a member of the Bank of Japan board said that the regulator should proactively mitigate monetary policy in order to reflect risks to the national economy.
The weakness of the dollar helped raise the yuan from an 11-year low to 7.1669 per dollar. However, the growth of the Chinese currency was still quite restrained, as traders continue to carefully monitor trade risks, while US President Donald Trump promised to tighten politics with Beijing if trade negotiations drag out.
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