Sterling was held back by remarks from Bank of England Governor Andrew Bailey, who said "nothing is decided" on future rate increases which had traders trimming back bets on higher rates. Sterling was down 0.5% to $1.1964. The dollar index , which measures the U.S. currency against six others - rose 0.39% to 104.79, boosted by a rise in U.S. Treasury yields and after Federal Reserve official Neel Kashkari left the door open to a 50-basis point rate hike at the Fed's next meeting in March.
Elsewhere the yen fell 0.37% to 136.72 to the dollar, while the Australian and New Zealand dollars and the Chinese yuan wavered slightly after strong gains on Wednesday that were supported by roaring Chinese manufacturing data. The Aussie dollar was last 0.44% softer at $0.6729. The New Zealand dollar , which rose 1.2% on Wednesday, fell 0.7% on Thursday to $0.6214.
China's yuan settled back to 6.9125 to the dollar after logging its biggest jump of 2023 on Wednesday. Investors are looking ahead to China's National People's Congress meeting, which begins on Sunday, watching for guidance on policy support for the post-COVID recovery. "Yesterday's positive surprise in the PMIs for China in February are a positive for mining commodity prices and the currencies of countries that export them," said Commonwealth Bank of Australia's head of international economics, Joe Capurso. "The yuan and commodity currencies such as the Australian and New Zealand dollars can rise materially if the meeting sends a pro-growth signal, as we expect," he said.
Bitcoin slipped 1% to $23,395 as trouble at crypto lender Silvergate weighed on the mood. Besides European inflation, euro zone employment and central bank minutes are due later in the day, as are U.S. jobless claims data. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Joice Alves in London and Tom Westbrook in Singapore; Editing by Shri Navaratnam and Emelia Sithole-Matarise)
