Stirling weakened by interest cut speculation

Story link: Stirling weakened by interest cut speculation

Sterling lost value in relation to the US dollar, the euro, the Swiss franc, and the yen on Wednesday, mostly due to bad news from the retail sector.

Sterling fell 0.9 percent to $1.7997 in relation to the US dollar, an eight-month low, before recovering to $1.8007.

The UK currency also lost 0.8 percent to £0.6691 against the euro, was down 0.6 percent in relation to the Swiss franc, to SFr2.3113, and declined 0.2 percent to ¥199.31 against the yen.

Figures released by the Confederation of British Industry showed the biggest drop in retail sales in the UK in 22 years. 42 percent of retailers surveyed reported a decline in sales while only 23 percent said that their sales increased.

Some analysts blame the drop at least in part on exaggerated data from last year‘s June sales, when hot weather and the Euro 2004 football championships sent sales figures higher.

Still, these figures inspired even more talk brought more speculation that the Bank of England might begin to cut interest rates in August.

In other currencies, the yen was down 0.7 percent in relation to the US dollar, to ¥110.65, before it rebounded slightly to ¥110.27 on weak economic data from the US.

The US GDP growth was revised upward to 3.8 percent, but the core personal consumption expenditure, which the Federal Reserve prefers as a measure of inflation, was revised downward to 2 percent.