The pound dipped to its lowest in more than three months against the euro on Wednesday and veered towards a three-month low on the dollar after UK manufacturing and housing data showed weaker than expected growth.
Analysts said sterling was losing out in every direction as its trade weighted index fell to a fresh 3-1/2 month low, with market expectations that UK interest rates were close to their peak serving to undermine a key source of support.
"We have a weaker housing market, softness in manufacturing data and a euro zone economy which is remaining soft, which is a large part of British exports," said Tim Fox, market strategist at National Australia Bank in London.
"It's an economy where people are perceiving rates are not going to go much higher."
The pound dipped to $1.7894, less than a cent above a three-month low set on Monday, and was holding close to that at $1.7920 at 1430 GMT, around 0.5 percent weaker on the day.
Against the euro, it tripped to 67.92 pence, its lowest in over three months, before inching back to 67.84, off 0.4 percent on the day.
Analysts said the pound was also being buffeted by market position-jostling on the euro and dollar ahead of key US jobs data on Friday.
The CIPS/Reuters manufacturing purchasing managers index fell to 53.1 in August from a downwardly revised 56.0 in July. While a reading above 50 indicates economic expansion, forecasts had been for 56.0 in August.
Sterling began August at around 106.5 on its traded weighted index, not far below a 107.10 1-1/2 year peak set in mid June, but it then declined sharply throughout the month and by Wednesday had set a 3-1/2 month low of 103.6.
Comments
Comments are closed.