Investing.com - The dollar fell to six-week lows against the pound on Wednesday after the Bank of England outlined plans to keep interest rates at current record lows until the U.K. unemployment rate falls to a threshold of 7%.
During European late morning trade, the dollar hit its lowest level since June 25 against sterling, with GBP/USD advancing 0.49% to 1.5423, after falling as low as 1.5207 earlier.
BoE Governor Mark Carney said the bank plans to keep interest rates on hold at 0.5% until the U.K. unemployment rate falls to a threshold of 7% from its current level of 7.8%, something he added is unlikely to occur for another three years.
The comments came during the press conference for the bank’s quarterly inflation report.
Carney said unemployment is not a target and that the 7% threshold could be set aside if low bank rates begin to pose a threat to financial stability, if the public's medium-term inflation expectations rise or if medium term inflation forecasts rise above 2.5%.
The BoE said that while an economic recovery was "taking hold" growth was likely to be "weak by historical standards."
The dollar was trading within striking distance of six-week lows against the yen, with USD/JPY down 0.57% to 97.18.
The dollar came under pressure as uncertainty over how soon the Federal Reserve will begin to unwind its stimulus program persisted following comments by senior Fed officials on Tuesday.
Chicago Federal Reserve Bank Chairman Charles Evans said he would not rule out the withdrawal of stimulus measures at the bank’s September meeting, echoing remarks by Dennis Lockhart, president of the Atlanta Fed earlier Tuesday.
The dollar was fractionally lower against the euro, with EUR/USD edging up 0.05% to 1.3312.
In the euro zone, official data showed that German industrial production jumped 2.4% in June, easily surpassing expectations for a 0.3% increase. The report came one day after stronger-than-forecast German factory orders data reinforced expectations that the euro zone economy is starting to recover.
The dollar slipped lower against the Swiss franc, with USD/CHF losing 0.12% to trade at 0.9249.
The Swiss franc was little changed after official data showed that Swiss consumer inflation fell 0.4% in July, in line with expectations.
The greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD down 0.53% to 0.8939, NZD/USD dipping 0.06% to 0.7894 and USD/CAD climbing 0.37% to 1.0414.
Official data released Wednesday showed that the number of employed people in New Zealand rose by 0.4% in the second quarter, and the unemployment rate ticked up to 6.4% from 6.3%.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.11% to 81.58.
