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Strong Eurozone data hits Sterling

Sterling fell briefly below $1.28 for the first time since late June today and deepened its recent losses against the euro as gloom over Britain’s economic prospects and the Brexit process encouraged investors to push the pound lower.

Sterling, which has fallen more than 3 percent against the dollar since the start of August, was trading at $1.2816 after touching a low of $1.2799 in early trades.

Against the euro it fell a quarter of a percent to 91.96 pence, its lowest since a short-lived “flash crash” in October.

The euro has strengthened through gains on strong private sector growth data from Germany remained muted as investors braced for speeches from European Central Bank President Mario Draghi this week.

With markets broadly trading in established ranges, investors were wary of taking fresh bets, with the only notable move lower among major currency pairs being a further decline in the British pound

Investors are awaiting speeches from Fed Chair Janet Yellen and Draghi at Jackson Hole on Friday, though neither is expected to announce new policy messages.

In a speech in Germany earlier this morning, Draghi steered clear of market-sensitive comments.

PMI data from Germany and France propped up the single currency, with both countries registering strong private sector growth in August, separate surveys showed. That served to lift confidence that the euro zone’s biggest economies are likely to maintain their robust momentum in the September quarter.

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