The pound fell for the fourth straight week versus the dollar, the most in over a year, after a series of not-so-good economic data ranging from consumer confidence to manufacturing output pushed it down.
The sterling fell 0.8 percent this week to trade at $1.6832 at 5:11 p.m. in London on Friday, when it touched $1.6814, its weakest level since June 12. This was the fourth weekly loss, the longest losing streak since March 8, 2013. The pound fell 0.9 percent to trade at 79.80 pence per euro, the biggest weekly decline since the period through February 21.
“Sterling declined because of various data results that have been uniformly disappointing this week but not dire,” Peter Frank, a London-based global head of Group-of-10 and Asia currency strategy at Banco Bilbao Vizcaya Argentaria SA, told Bloomberg. “We have a forecast for a mild underperformance of sterling in a short-to-medium term period where we think the market has got ahead of itself on how much growth there is likely to be in U.K. economy and what the reaction function will be of the Bank of England.”
The pound lost ground against the dollar after a report indicated that the U.S. gross domestic product increased more than expected while employers absorbed over 200,000 workers for the sixth straight month, fuelling bets the Federal Reserve may increase borrowing costs.
The U.S. GDP increased by an annualized 4 percent rate in the April-June quarter, while U.S. businesses absorbed 209,000 new employees in July. This compares with 298,000 in June, reported the Labor Department on Friday.
An index of U.K. manufacturing activity fell to 55.4 in July compared with 57.2 a month earlier, reported Markit Economics on Friday. A gauge of consumer confidence plunged to negative 2 in July compared with 1 a month earlier, reported GfK on July 31. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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