020 7898 0500Sterling weakened against the euro on Friday and was poised for a third consecutive week of losses as a global selloff in risky assets prompted investors to cut bets after a week of weak UK data. With growing market expectations that the Bank of England is unlikely to raise interest rates over the coming months due to Brexit-related risks and business uncertainty, the pound slipped towards a fresh eight-month low. Market expectations for a UK rate hike are now well into the second half of 2018.
Against the dollar, sterling was a shade higher largely due to broader issues in the US.
Noise around Britain’s strategy for leaving Europe and talks on the issue with Brussels have provided little positivity for the market who are worried that the process is becoming increasingly chaotic and may do longer-term damage to the economy.
This week is very quiet for the UK on the data front, so attention will continue to be on interest rate speculation and Brexit-related activity.
