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Sterling dropped by 0.7 per cent to $1.5731 against the US currency earlier today and moved towards a five-month low of 78.8 in terms of a trade weighted basis, Reuters reports.
But the news provider revealed that the pound extended its losses versus the dollar - dropping by around 30 pips after the data announcement to $1.5780 - later in the day after an unexpected fall in UK retail sales.
However, the weak UK information was in contrast to stronger-than-expected activity statistics seen in Germany.
Moreover, there are other concerns on the market about whether the Bank of England will opt for further quantitative easing (QE).
This led a Lloyds analyst to note: "The scale of the proposed cuts underlines the likelihood of low UK yields for a long time and the probability of QE."
Posted by Chris Weaver
