By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) -- The pound was set to mark its sixth weekly drop against the U.S. dollar on Friday, underscoring the British currency's retreat amid a dovish shift in monetary policy.
Earlier in the week, the Bank of England's inflation report signaled the central bank was on track to raise its key lending rates in early 2015. But Bank of England Gov. Mark Carney walked back expectations by emphasizing that labor market conditions remained soft.
The pound made a run higher in June after Carney signaled rate hikes could come earlier than expected. But since then, shifting expectations of the timing have pushed sterling lower.
The pound (GBPUSD) bought $1.6694 on Friday, up slightly from $1.6688 late Thursday. Still, that's down from $1.6796 a week ago, putting the currency right near its 200-day moving average.
Sterling's drop this week has cemented its place as the worst-performing developed-world currency so far this month, said Jane Foley, senior currency strategist at Rabobank, in a note. "Investors have been scurrying to push back their forecasts of when the BoE may first start to hike rate amid accusations that Carney had misled them in previous speeches."
Elsewhere, the dollar (USDJPY) bought Yen102.66, up from Yen102.46 late Thursday. The euro (EURUSD) bought $1.3398, up from $1.3367. The dollar index (DXY), which measures the currency against a basket of its rivals, was down at 81.451 from 81.579.
Investors showed little reaction to U.S. data. Producer prices showed low inflation in July while the August Empire state index dropped from a four-year high.
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(END) Dow Jones Newswires
August 15, 2014 09:43 ET (13:43 GMT)
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