The pound weakened to a seven-month low against the dollar after Bank of England policy maker Martin Weale endorsed the currency’s decline, saying it may help bolster exports.
Sterling dropped for the first time in three days versus the euro amid speculation central bank minutes to be released this week may echo those from January, which said sterling’s real exchange rate was above the level needed to help the economy rebalance. Futures traders scrapped bets the pound would strengthen, data from the Washington-based Commodity Futures Trading Commission showed. Gilts were little changed.
“Investors are struggling to have faith in sterling,” said Simon Smith, chief economist at FxPro Group Ltd. in London. “Investors are seeing an economy which is possibly entering another recession and is likely to see inflation holding above target. The central bank is also wanting to see the currency lower. Weale’s comments were a fresh piece of evidence.”
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