British pound gains

TOKYO (Reuters) – FX SIGNALS The British pound held firm near a three-month high against the dollar on Friday on rising expectations of an earlier than expected rate hike by the Bank of England, while the U.S. currency looks to upcoming inflation data.

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Against the euro, the pound changed hands at 85.83 pence per euro, near its five-week high of 85.615 pence per euro. On the yen, the pound hit a three-year high of 156.02 yen.

The euro stood at $1.2192, hovering below its 5 1/2-month high touched on Tuesday of $1.2266 as dovish comments from European Central Bank officials sapped its momentum ahead of its policy meeting on June 10.

The dollar jumped to 109.85 yen, breaking out of its tight range over the past few weeks, to reach its highest levels in about seven weeks.

The jump likely reflected yen selling due to MSCI’s reshuffle of its standard stock index, from which nearly 30 Japanese names were dropped, analysts said. (T)

The yen was hampered also by concerns about a delay in Japan’s economic recovery after media report that Japan is looking to extend a state of emergency in Tokyo and several other areas by three weeks to June 20.

In addition, the dollar enjoyed a boost from higher U.S. bond yields after a New York Times report that President Joe Biden will announce on Friday a $6 trillion budget for 2022

The proposal came as the U.S. economic recovery appears to gain momentum.

Sterling gains dollar on back foot

The number of Americans filing new claims for unemployment benefits dropped more than expected last week to a seasonally adjusted 406,000 with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy.

Sterling gains on Brexit deal

While that is way above the Federal Reserve’s target of 2%, economists expect core inflation to gradually slow later in the year, thus allowing the Fed to stick to the current size of asset purchases for the time being.

Dollar Down Pound Up Over Brexit

Elsewhere, the offshore Chinese yuan fetched 6.3755 per dollar, having hit a three-year high of 6.3679 overnight on rising expectations the Chinese central bank is comfortable with a stronger currency amid the country’s economic recovery.

FX Signals – Dollar climbs against yen

In cryptocurrencies, bitcoin changed hands at $38,094, relatively stable during the past 24 hours. Ether stood at $2,732.

British pound gains

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British pound gains