- The euro slid to near four-month lows against the dollar on Wednesday as the widening yield gap between euro zone and U.S. government bonds weighed, while sterling strengthened across the board after an upbeat U.K. employment report.

EUR/USD slid 0.10% to 1.3532, not far from the four-month trough of 1.3502 reached last Thursday.

Demand for the dollar continued to be underpinned by higher U.S. Treasury yields. Borrowing costs in the euro zone have fallen in recent sessions due to the diverging monetary policy stance between the European Central Bank and the Federal Reserve, widening the yields between some euro area government bonds and U.S. Treasuries.

The ECB cut all its main rates to record lows on Thursday and for the first time imposed negative deposit rates on commercial lenders, in a bid to tackle persistently low rates of inflation and shore up the recovery in the region.

Elsewhere, the pound rose to session highs against the dollar, with GBP/USD up 0.18% to 1.6787 after data showed that the U.K. unemployment rate fell to 6.6% in the three months to April, the lowest since early 2009.

The claimant count, or number of people receiving jobless benefits fell by 27,400, ahead of forecasts for a for a decline of 25,000 people. April’s figure was revised to a drop of 28,400 from 25,100.

The data added to the view that the Bank of England will raise interest rates ahead of other central banks as the economic recovery continues to gather momentum.

Sterling rose to its highest level since December 2012 against the euro, with EUR/GBP down 0.33% to 0.8057.

USD/JPY was trading at 102.05, down from 102.34 late Tuesday, while USD/CHF eased up 0.14% to 0.9004.

The Australian and New Zealand dollars moved higher, with AUD/USD climbing 0.22% to 0.9393 and NZD/USD up 0.33% to 0.8555. USD/CAD dipped 0.09% to 1.0892.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady close to a one-week high at 80.82.

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