The British Pound Sterling, on Friday, August 18, dropped against the euro and was poised for a third consecutive week of losses as a global selloff in risky assets prompted investors to cut bets after a week of tepid U.K. data.
Sterling was a touch lower against the single currency at 91.10 pence per euro as risk appetite took a beating across the board.
With growing market expectations that the Bank of England is unlikely to raise interest rates over the coming months due to Brexit-related risks and business uncertainty, the pound slipped towards a fresh 8-month low on a trade-weighted basis.
“This week’s wages and retail sales data did little to alter the growing market belief that a U.K. rate hike is likely only in the second half of 2018 and with a thin data calendar for the next couple of weeks, the market will be rangebound,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
One-year interest rate swaps have fallen nearly 8 basis points from a one-year high hit in late June to 26 basis points on Friday, indicating dwindling rate expectations.
Against the dollar, sterling was a shade higher against the U.S. dollar largely due to broad greenback-related weakness across the board.
The disarray in the White House, with U.S. President Donald Trump’s economic agenda seen under threat, hammered U.S. stocks on Thursday and is the main driver for global equities on Friday.
Shares sold off in Asia and European investors have followed suit. The dollar is down against the yen and yields on low-risk German debt have fallen, Reuters reports.