Investing.com - The dollar fell to two-week lows against the pound on Wednesday after the Bank of England upgraded its forward guidance policy, while the euro was broadly weaker following comments by a senior European Central Bank official.
GBP/USD hit 1.6571, the highest since January 29 and was last up 0.73% to 1.6570.
Sterling was boosted after the Bank of England outlined a new forward guidance policy on Wednesday and raised its forecast for economic growth this year.
The BoE indicated that it will keep interest rates on hold at record lows of 0.5% for at least another year, despite revising up its U.K. economic growth forecast for 2014 to 3.4% from 2.8%.
The bank said it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it does not see happening until 2015.
EUR/USD was down 0.37% to 1.3586 after ECB Executive Board member Benoit Coeure said in an interview with Reuters that the bank is considering a negative deposit rate very seriously.
The euro’s steep losses against the pound also weighed on the EUR/USD pair. EUR/GBP tumbled 1.13% to 0.8195, not far from the one-year lows of 0.8167 struck on January 22.
The dollar slid lower against the yen, with USD/JPY down 0.12% to 102.50, but pushed higher against the Swiss franc, with USD/CHF rising 0.35% to 0.9014.
Elsewhere, the Australian dollar eased back from one-month highs, with AUD/USD dipping 0.03% to 0.9034.
The pair rose to session highs of 0.9068 earlier after data on Wednesday showed that Chinese exports jumped 10.6% in January from a year earlier, far outstripping expectations for 2% gain, while imports jumped 10% and the trade surplus widened.
China is Australia’s largest export destination.
NZD/USD was last up just 0.05% to 0.8323 after rising to one-month highs of 0.8368 earlier.
The U.S. dollar edged lower against the Canadian dollar, with USD/CAD inching down 0.10% to 1.0995.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, eased up 0.09% to 80.78.