Sterling hit its highest in nearly eight weeks against the euro on Monday on speculation that monetary policy in the eurozone would remain more accommodative than in Britain. However, the pound slipped against the dollar, which rose broadly as a slide in US shares suggested a chill in demand for risky assets. Traders also cited fixing-related demand to sell sterling in late London trade.
The euro slipped to 81.43 pence, its weakest since late June, as the single currency struggled after European Central Bank Governing Council member Axel Weber said late last week the ECB should extend its loose monetary stance. At 1513 GMT, the euro was down 0.2 percent at 81.64 pence. It earlier fell as low as 81.43 pence, its weakest since June 30, after traders said stop loss orders were triggered below 81.60 pence.
Against the dollar, the pound was slightly lower on the day at $1.5510, pulling away from a session peak of $1.5620. The pound managed to tread above its 200-day moving average at $1.5476, and technical analysts said its upside bias remained as long as sterling continued to close above the 200-day average mark.
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