Friday, as investors added risky bets against the British pound sterling on concerns that the British economy might be struggling to gain economic momentum, the British currency plunges to a massive 10-month low against the euro. The British pound traded at 90.92 pence against the euro, which is down by 0.2% and is considered as the currency’s lowest level since October of the previous year (2016).
In accordance to this, Jane Foley, head of FX strategy at Raborbank in London, said that the liquidity of the currency is quite thin in the summer months, and that being said is the continuation of the trend in the previous weeks that the British economy is not doing well, thus, this mishaps are putting a weight on the pound. On the other hand, Morgan Stanley strategists are foreseeing euro equivalence with the British pound in the first quarter of 2018.
The British pound sterling stood firm and held a near three-week lows against the United States dollar, trading at %1.2980, which was just an inch above a three-week low of 1.2952 hit in the previous session on Friday last week. The pound is on trach to post its biggest two-week decline against the greenback since March 2017.
FX strategist at ING in London, Viraj Patel, said that the July bounce in the British pound was on some expectations that the BoE or the Bank of England would increase interest rates on its last policy meeting, however, with details looking increasingly downbeat for the British economy, it seems to be a path of continuing weakness.