Sterling hit a two-month low against the dollar on Friday on diminishing expectations of a near-term UK rate hike and a growing view that US rates are on the up.
Sterling was under pressure following news on Thursday of the unexpected death of David Walton, the only Bank of England Monetary Policy Committee member to vote at the last two meetings for a rise in rates from the current 4.5 percent.
At the same time speculation is growing that the US Federal Reserve will raise rates next week by 50 basis points from the current 5 percent.
"The very sad news about David Walton did not help the (sterling) market - he was a hawk, and now an imminent hike in interest rates looks less likely," said Audrey Childe-Freeman, European economist at CIBC World Markets.
"The dollar is looking a lot stronger over the past few days on the back of renewed talk of a more aggressive stance by the Fed, with some speculation the Fed may go by 50 basis points."
Sterling fell as far as $1.8128, down nearly one percent from the US close against the broadly strong dollar, but recovered to $1.8189 by 1410 GMT in choppy dollar trading.
The pound fell slightly against the euro, to a two-week low of 68.87 pence. Euro zone interest rates are widely expected to rise from the current 2.75 percent.
The pound also matched a six-week low on its trade-weighted index, at 100.5.
Fine weather and the World Cup helped drive weekly sales at British retailer John Lewis's department stores up 11.9 percent, the retailer said on Friday.
Comments
Comments are closed.