BLBG: Pound Set for Worst Week Since May Versus Euro on Rates Wagers
The pound headed for its biggest weekly decline since May against the euro as the bullishness on interest rates whipped up by the Bank of England was punctured by economic data.
Sterling slipped 1.7 percent versus the single currency and 0.7 percent against the dollar this week as a report Thursday showed retail sales unexpectedly declined. That contributed to waning optimism the BOE will raise rates this year, a week after hawkish comments from policy makers pushed the pound to its strongest level against the euro since 2007.
“The June retail sales figures were very disappointing,” said Marshall Gittler, head of global currency strategy at IronFX Financial Services Ltd. in Limassol, Cyprus. “People may just have taken some profits on the disappointment.”
The pound pared its weekly slide against the euro on Friday, advancing 0.2 percent to 70.64 pence as of 11:41 a.m. London time. It was still lower versus the dollar, dropping 0.2 percent to $1.5490.
Implied yields on short-sterling futures contracts expiring in December fell four basis points, or 0.04 percentage point, in the past week to 0.73 percent. The U.K. central bank has held its main interest rate at a record-low 0.5 percent since March 2009.
