Sterling hit a two-month trough against the dollar and its lowest level in more than four months versus the yen on Wednesday, as weak labour market data further scaled back expectations for UK interest rate rises.
The figures added downward momentum to the pound, already reeling from heavy losses on Tuesday that took it below $2 after July consumer price numbers showed inflation below the BoE's 2 percent target rate for the first time since March 2006.
Investors also continued to reduce exposure to carry trades that target high-yielding units like sterling as risk aversion, sparked by credit market worries, rippled through markets.
Analysts said this week's data had softened the fundamental picture for sterling, with the vast majority of economists polled by Reuters on Wednesday ruling out an increase in interest rates next month, while 20 of 53 now think rates have peaked at 5.75 percent.
At 1407 GMT, sterling was down 0.1 percent on the day at $1.9933, having earlier hit a 2-month low of $1.9857. The pound was down 0.3 percent against the yen at 233.99 yen, having earlier hit its lowest level since April 2. A broadly weaker euro was down 0.1 percent at 67.68 pence.
The Office for National Statistics said average earnings including bonuses rose 3.3 percent in the three months to June, below forecasts for a steady reading of 3.5 percent and the weakest rate since June 2003. Minutes from the Bank of England's last rate-setting meeting showed policymakers voted unanimously to keep interest rates at 5.75 percent and most had no firm view on whether rates may need to rise further.
Comments
Comments are closed.