Sterling fell to its lowest level in a year against the euro on Thursday, on the back of a renewed rally in the single currency and data showing a widening British current account deficit. Sterling had also tumbled around 1 percent against the euro and dollar on Wednesday after minutes from the Bank of England's latest policy meeting showed some council members looking at the downside risks to inflation rather than upside risks.
It took another knock on Thursday after Britain's current account deficit widened to 8.774 billion sterling from the second quarter deficit of 5.82 billion. Forecasts had been for a widening to 6.5 billion.
"The short-term risk after the more dovish minutes has been for some profit-taking," said Lena Komileva, global economist at Prebon Marshall Yamane.
"The fact sterling is under-performing today after the weaker-than-expected current account deficit is hardly a surprise given currency movements have been driven by the heavy flow of trade data from the G10."
The pound fell to 70.40 pence per euro, its weakest level since early January, but pulled back up to 70.30 by 1622 GMT, around half a percent lower on the day.
The pound dropped to $1.9140 before recovering to $1.9186, up 0.2 percent on the day.
The euro itself was around 0.8 percent higher against the dollar at a new record. The greenback has come under strong selling pressure in recent months as concerns have mounted at the scale of its current account deficit - around 5.6 percent of economic output.
The New Zealand dollar has been hit recently by a widening in its current account deficit, as has fellow high yielder the Australian dollar.
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