By Anneken Tappe, MarketWatch

British pound bounces after worst day in more than 2 years

The U.S. dollar sold off versus its major rivals Friday in New York after Federal Reserve Vice Chairman Richard Clarida offered some dovish comments. The ailing buck gave more room to rebound to the British pound, which recovered from its worst one-day performance in more than two years on Thursday.

Clarida in an interview with CNBC (http://www.marketwatch.com/story/feds-no2-clairida-says-there-are-signs-global-growth-is-slowing-but-doesnt-think-rate-hikes-are-too-rapid-2018-11-16) offered a more dovish view on the Fed's path to monetary policy normalization, but said that central bank's pace of rate hikes wasn't too fast. Clarida also said the global economy showed signs of slowing.

The U.S. dollar weakened following the comments, with the ICE U.S. Dollar Index dipping 0.5% to 96.478. The gauge is on track for a 0.4% decline for the week, according to FactSet.

The dollar gauge was largely unaffected by trade-related comments from President Donald Trump, who said the U.S. may not have to impose further tariffs on China and that he didn't want to put "China in a bad position."

Meanwhile, the "anti-dollars", the British pound and the euro, benefited from the buck's weakness.

Sterling bounced back from the sharp loss incurred Thursday on the back of further government resignations over Brexit. Sterling, which logged its worst performance since October 2016 on Thursday, according to Dow Jones Data Group, was at $1.2830, up from $1.2774.

Prime Minister Theresa May got a new Brexit secretary to join her cabinet on Friday, with Steve Barclay stepping up to the challenge after Dominic Raab stepped down on Thursday.

Check out:These are the latest resignations from the U.K. government that rattled investors (http://www.marketwatch.com/story/these-are-the-latest-resignations-from-the-uk-government-that-rattled-investors-2018-11-15)

But the outlook remains uncertain after multiple calls for a vote of no confidence in Prime Minister Theresa May were made Thursday. Investors are also concerned about the likelihood of May getting an agreement with Brussels through parliament in next month's Brexit bill vote. In case of a "no" vote, the options would be a "no-deal" Brexit, new elections or a second referendum.

Don't miss:Brexit turmoil: Here's what's at stake if U.K.'s May faces a leadership challenge (http://www.marketwatch.com/story/brexit-turmoil-heres-whats-at-stake-if-uks-may-faces-a-leadership-challenge-2018-11-16)

Read:Here's how much Brexit turmoil might whack the British pound, analysts predict (http://www.marketwatch.com/story/heres-how-much-brexit-turmoil-might-whack-the-british-pound-analysts-predict-2018-11-15)

In continental Europe, the euro last bought $1.1411, slightly up from $1.1332 late Thursday in New York.

Versus the pound, the shared eurozone currency was up 0.3% at GBP0.8893

Harmonized eurozone inflation increased 2.2%, in line with expectations, year-over-year in October, while core inflation stood at 1.1% over the same period. European Central Bank President Mario Draghi said in a speech earlier that eurozone inflation could be negatively affected by businesses dealing with uncertainties. The ECB is expected to begin raising interest rates, for which rising inflation is a key condition, around summer next year.

Speaking of interest rates, Mexico's central bank upped its key rate by 25 basis points to 8% Thursday, in line with consensus expectations. Mexico's peso is a popular emerging market currency, in part due to its high local interest rates. One dollar last bought 20.1224 pesos, versus 20.2293 pesos late Thursday.

(END) Dow Jones Newswires

November 16, 2018 15:27 ET (20:27 GMT)

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