Euro dips to two-week low, Turkish lira weakest on record

Turkey’s lira fell to a record low of 7.25 per U.S. dollar TRY=, after traders interpreted comments from a Federal Reserve policymaker as ruling out a Fed swap line to cushion Ankara’s depleted reserves. Sterling rallied after the Bank of England left interest rates steady and held off on more stimulus. The safe-haven yen edged away from near seven-week highs against the dollar.

The euro dipped to $1.07785, its lowest level in almost two weeks and reversing modest gains earlier in the day. It has shed more than 1.5% this week and is set for its biggest weekly drop in just over a month. It has been hurt by Tuesday’s ruling from Germany’s highest court that gave the ECB three months to justify purchases under its bond-buying programme or lose the Bundesbank’s participation in one of its main stimulus schemes.

Relief that the Bank of England held off on further stimulus at its meeting on Thursday boosted sterling, although the British currency trimmed its gains as the session wore on. It was last up just 0.1% at $1.2359, off a session high of $1.2418.

In contrast, Norway’s central bank cut its key interest rate to a record-low of zero from 0.25%, in a surprise move to cushion an economy reeling from the COVID-19 pandemic. Norwegian crown briefly weakened against the euro and the dollar before recovering ground.

Stronger-than-expected Chinese export numbers lifted hopes in global markets that China can rebound quickly and help global growth recover from a coronavirus-induced shock. That helped reduce demand for the safe-haven yen. The U.S. dollar was last up 0.45% at 106.57 yen, having fallen on Wednesday to 105.985, its weakest since mid-March.

The Aussie dollar was last up 0.9% at $0.6464.