Sterling hit a fresh all-time low versus the euro on Wednesday and charted its lowest in four years on a trade-weighted basis as investors anticipate soft UK economic data will lead to lower interest rates.
Sterling has fallen steadily versus the euro since September and a unanimous vote to cut rates to 5.5 percent at the Bank of England's December meeting has increased views that rates are set to fall further in the near future.
"The outlook for the UK economy is soft for the year and it's likely to be affected by a slowdown in the U.S. economy more than the euro zone and this has seen sterling weaken against the euro," said Paul Robson, currency strategist at RBS Global Banking.
By 8:17 a.m., the euro had touched a fresh all-time high at 74.01 pence. The pound was down 0.3 percent versus the dollar at $1.9806.
On a trade-weighted basis, the pound touched its lowest level since late 2003 at 97.3.
Investors will watch the UK manufacturing PMI for December at 9:30 a.m. for further clues on the outlook for monetary policy. Analysts polled by Reuters forecast a figure of 53.6, down slightly from the previous month.
Source Supplied By Reuters.
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