Sterling drops below $2 versus greenback

Sterling drops below $2 versus greenback

Story link: Sterling drops below $2 versus greenback

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Sterling weakened on Tuesday, falling to below $2 versus the US dollar for the first time in over a month and a half as inflation data and house price expectations both declined.

Consumer price inflation dropped to 1.9 percent in July, well lower than the 2.3 percent CPI that was expected and below the Bank of England’s target for the first time in over a year, cutting the likelihood that the Bank will hike interest rates in September.

In addition, the pound was hurt by new data from the Royal Institution of Chartered Surveyors that shows a majority of surveyors and real estate agents expect that house prices will fall over the next three months.

The UK currency dropped 0.4 percent to €0.6790 versus the euro, while it fell 0.7 percent to $1.9990 against the US dollar and by 0.8 percent to ¥236 in relation to the yen.

The yen was also stronger versus the dollar and the euro, to ¥118.10 and ¥160.20 respectively.

The euro dropped 0.2 percent against the greenback, to $1.3575.