The British Pound Sterling dropped half a percent against a broadly stronger dollar in morning trade in London on Thursday, June 15.
This came as weak retail sales numbers and concerns about efforts to form a new minority government drove the Pound back below $1.27.
The pound was also 0.1 percent weaker against the euro and traders said the mood was edgy after a delay in sealing the support from Northern Ireland Unionists that Prime Minister Theresa May needs to continue in power.
By 0943 GMT, sterling fell 0.5 percent to $1.2692, and less 0.1 percent against the euro to 87.95 pence
Since May lost her majority last Thursday, trade-weighted measures of sterling are down just under two percent and a bleak economic landscape threatens to worsen that fall.
The Bank of England publishes its latest views on interest rates on Thursday, faced with further evidence of sharply rising prices, wage growth that is failing to keep pace and a weakening of demand from consumers.
“The overall trend is still not bad, the retail numbers are still holding up, but the likes of (business lobby) the CBI, the BRC (British Retail Consortium) are not optimistic,” said Neil Mellor, a strategist with Bank of New York Mellon in London.
“It is abundantly clear that the BoE will not be in a position to raise interest rates for a very long time.”
The move came as most major currencies suffered against the greenback after the U.S. Federal Reserve stuck to its guns on forecasts of further rises in interest rates and gave its first hint of a trimming of its huge bond portfolio.
