Sterling fell on Friday, hitting its lowest level against the euro since June 1 as rising European money market rates and higher equities stoked demand for the single currency. Better-than-expected US corporate earnings this week, including from Bank of America and General Electric on Friday, have also helped to stoke demand for higher-risk currencies, which has benefited the euro.
Sterling hits 84.58 pence per euro, weakest since June 1 The pound's losses versus the euro helped to pull it away from a 2 1/2-month high hit against the dollar the previous day, but losses were limited after the UK currency closed decisively above a key technical level on Thursday. By 1419 GMT, the euro was up 0.8 percent on the day at 84.37 pence, having rallied as much 1.0 percent to 84.58 pence, its strongest since June 1. It is poised to end the week 0.7 percent higher.
The single European currency rose broadly on Friday, as the recent rise in euro-priced bank-to-bank lending rates picked up pace, pushed on by the sharp drop in spare European Central Bank cash in money markets. This helped to lift the currency above 84.38 pence, the 50 percent retracement of the euro's peak-to-trough move between May and June. Sterling fell 0.7 percent to $1.5344, pulling away from $1.5473 hit on Thursday, its strongest since late April.
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