The pound fell for the first week in a month against the dollar as reports last week failed to surpass economists’ forecasts, fueling speculation the recovery isn’t strong enough to lead to an early interest-rate increase.
The U.K. currency dropped against all of its 16 major counterparts as Morgan Stanley said sterling looked to be “overextended” after recent gains. The central bank won’t tighten monetary policy until the economy is growing at “a sustained pace,” Bank of England Governor Mark Carney said this week. Policy makers announce their next policy decision on Oct. 10. U.K. government bonds declined.
“The pound has had a fantastic run recently and it gets to the level where profit-taking looks like an attractive option,” said Kathleen Brooks, European research director at Forex.com in London. “A lot of good news on the economy is already in the price. The risk is that the stronger the pound, the Bank of England may come out and do something as they are committed to keeping interest rates low.”
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