The pound fell for a second day against the dollar, reaching the lowest level in six weeks, as investors judged the rally that helped push the U.K. currency to a 4 1/2-year high was overdone.
The dollar weakened from a one-month high against its major peers reached last week before a report forecast to show U.S. durable goods orders dropped in April.
The global currency wars are heating up again as central banks embark on a new round of easing to combat a slowdown in growth.
The pound weakened from near a two- year high versus the dollar after an industry report showed U.K. service growth slowed more in November than economists forecast.
Pound bulls still have reason to be optimistic following the Bank of England’s attempts to temper interest-rate expectations, according to firms from Bank of New York Mellon to Mizuho Bank Ltd.
The case for European Central Bank action to curb the euro’s gains is getting stronger after the 18-nation currency jumped to within a half-cent of $1.40.
The yen rose, snapping a two-day decline against the dollar and the euro, as concern over the pace of the U.S. recovery and the financial health of European banks boosted demand for Japan’s currency as a refuge.
"The U.K. is just coasting toward monetary tightening, things are going very well."
- Neil Mellor on Jul 18, 2014
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