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Sterling Continues To Slide

The British pound steadied around the $1.30 mark on Friday as traders took stock at the end of a bruising week in which weak economic data and more political uncertainty around the government’s Brexit position hammered sterling.

The currency dropped to its weakest, after worse-than-forecast retail sales data and slower-than-expected inflation rises combined with a dollar rally.

The European Union on Thursday warned business to get ready for Britain crashing out of the bloc without agreed terms to cushion the economic disruption.

That warning comes amid ongoing concerns about Prime Minister Theresa May’s ability to get Brussels – and her own party – to agree to her vision of life after the European Union.

With no major economic news on Friday and the British parliament headed for the summer recess next week, traders are looking to the Bank of England meeting in early August.

Despite the relatively weak run of economic news, the market is still pricing in a two-thirds chance of a 25 basis point rate rise in August, although that is down from nearly four-fifths at the start of the week.

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