Sterling fell on Friday, hurt by a firmer dollar after remarks by US Federal Reserve Chairman Ben Bernanke were seen as hawkish and bolstered the view that UK interest rates would stay low longer than those of its peers.
A broadly weaker pound also was battered against some other G10 currencies and hit multi-year lows against the Norwegian crown and the Australian and Canadian dollars. "The comments came as investors look for evidence that the policy tightening timetables of other central banks will be brought forward in response to Australia's unexpected rate hike this week," said Geoffrey Yu, currency strategist at UBS.
Sterling was a big loser because Britain was expected to be among the last major countries to withdraw its extremely easy monetary policy due to its poor economic performance. By 1410 GMT, sterling was down 0.8 percent on the day at $1.5933, after hitting a session low of $1.5905.
Selling accelerated in thin trade as traders closed positions ahead of a holiday in the United States and Japan on Monday. The pound also lost ground against the euro, falling 0.5 percent at 92.53 pence. The Norwegian crown rose beyond 9 crowns per pound to its highest since 1977.