GBP/USD drops to 1.6850 as Data Disappoints

The pound slid toward the lowest level in eight weeks versus the dollar and yields on Britain’s government bonds dropped to a one-year low on concern the U.K.’s economy is falling short of analysts’ expectations.

Sterling weakened against all but two of its 16 major counterparts as data showed Britain’s shop prices dropped the most on record last month. Industrial output also climbed less than economists forecast in June, according to a separate report. A gauge of inflation expectations for the next decade declined to the lowest level since January 2013. Political leaders held a televised debate yesterday in advance of Scotland’s Sept. 18 referendum on independence.

“We have become much more conscious of the risks for the pound,” said Michael Sneyd, a foreign-exchange strategist at BNP Paribas SA in London. “Partly around the fact that the data is softening slightly and also around Scotland’s referendum.”

Bloomberg

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