The U.S. dollar rose Thursday, extending Wednesday's big upturn, while sterling slipped on worries about the political future of Britain's Conservative government.
In London, a leaked opinion poll suggested that the opposition Labor Party is five points ahead of the ruling Tories in 50 key parliamentary constituencies.Sterling also fell on news that February new-car sales in the United Kingdom fell 12 percent from a year earlier, double January's 6 percent fall.
Some dealers said there was talk Britain may lower its base lending rate soon. The rate is the equivalent of the U.S. prime rate. There was also talk of an early U.K. election.
Overall, market participants have been bullish for weeks in the belief the U.S. economy is in a recovery phase. Outside of a retracement last week, the
dollar has been in an uptrend since Feb. 10.
There was no immediate reaction to news that U.S. state jobless claims fell 21,000 in the latest week.
Dealers said today's U.S. employment figures for February are not expected to be weak enough to drive U.S. interest rates lower.
Analysts predict overall unemployment will be reported steady at 7.1 percent and non-farm payroll little changed.
The dollar also was aided by a rise in U.S. department store sales in February.
Some selling in Japanese yen stemmed from institutional buying of dollars to adjust books before the Japanese fiscal year ends March 31.
Continued speculation the Bank of Japan will lower interest rates before the Federal Reserve does also kept yen buyers on the sidelines. Traders said the yen already had built in a half-point cut in Japan's 4.5 percent discount rate.