Pound Slides After Bank of England Decision

By Chelsey Dulaney Features Dow Jones Newswires

The British pound tumbled Thursday after the Bank of England struck a cautious tone on the U.K. economy, while the U.S. dollar wavered after mixed data.

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The pound was recently down 0.7% to $1.313. The WSJ Dollar Index, which measures the U.S. currency against 16 others, slipped 0.1% to 85.83.

The Bank of England left rates unchanged as expected but cut its forecast for economic growth this year and next.

"The overall cautious tone contradicted mounting expectations for a BOE lending rate hike over the recent weeks and wrong-footed many investors that were betting on a more hawkish tone," said analysts at Commonwealth Foreign Exchange.

Meanwhile, the dollar oscillated after mixed U.S. data. A report from the Institute for Supply Management showed U.S. service-sector activity slowed more-than-expected in July.

Separate reports showed orders at U.S. factories surged in June, while the number of Americans filing for unemployment benefits fell last week.

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The data comes ahead of Friday's closely watched U.S. jobs report. Investors are focused on U.S. data as they assess the outlook for further U.S. interest-rate increases. Higher rates typically support the dollar by making U.S. assets more attractive to yield-seeking investors.

The dollar fell 0.6% against the Japanese yen, 0.4% against the Swiss franc and 0.6% against the Russian ruble.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

(END) Dow Jones Newswires

August 03, 2017 11:00 ET (15:00 GMT)