Sterling fell broadly on Wednesday, plumbing a eight-month low against a basket of currencies, after Bank of England minutes showed policymakers judged the growth outlook had weakened and some believed more stimulus may be needed. The pound slid as the BoE minutes signalled UK interest rates were unlikely to rise from their record low 0.5 percent this year and flagged a greater chance of the BoE opting instead for more quantitative easing.
That left the euro poised to test its June 8 high of 89.76 pence and the key 90 pence mark, although analysts said concerns about the debt crisis in Greece may limit gains for the single currency. Against the dollar, sterling was down 0.8 percent at $1.6110, leaving it on course for a test of the mid-June low of $1.6078 and its 200-day moving average around $1.6028, a move below which could signal more losses ahead. "It is clear that the BoE is not going to be raising rates any time soon and it's no surprise sterling is weakening," said Gavin Friend, currency strategist at nabCapital.
The euro was last up 0.7 percent at 89.32 pence, having hit a high of 89.35 pence, the highest since June 8. It also hit a record low of around 1.3522 francs, according to Reuters data. The pound's broad-based weakness pushed its trade-weighed index down to 78.4, its weakest since late October.