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Sterling languishes near 37-year low vs dollar

Pound and U.S. dollar banknotes have emerged in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

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LONDON, Sept 19 (Reuters) – Sterling was weaker against a robust dollar on Monday, hovering near last week’s 37-year low, with sentiment towards the British currency remaining weak given a darkening economic outlook.

Currency trade was generally subdued with London markets closed for the Queen’s funeral. read more

It is a potentially big week for the battered currency considering that the lender of England is meeting on Thursday and new finance minister Kwasi Kwarteng is on Thursday or Friday likely to deliver his first fiscal statement with further information on a power price cap and tax cuts anticipated. read more

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As the Bank of England is likely to raise rates by at the very least 50 basis points (bps) this week, the chance of further tightening has didn’t shore up the pound. The Federal Reserve can be meeting this week and expectations for a straight bigger hike of at the very least 75 bps has bolstered the dollar.

The pound was last trading at $1.1381 , down about 0.5% on your day and within sight of the 37-year low hit on Friday at $1.1351.

Sterling was also an impression weaker at around 87.77 pence per euro , having touched its lowest levels since early 2021 on Friday at around 87.83 pence.

“The momentum is weak and the moves have already been strong,” said Nordea chief analyst Jan von Gerich. “We ought to visit a stabilisation at some time, but it’s hard to state when that may come.”

Sterling is down roughly 16% contrary to the dollar up to now this season, putting it on the right track because of its worst year since 2016 – once the Brexit referendum outcome roiled UK markets.

While sterling isn’t the only real currency to possess slid contrary to the greenback this season, the pound had been hurt by way of a bleak UK economic outlook.

Britain gets the highest inflation rate on the list of world’s big rich countries but can be vulnerable to slipping right into a recession.

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Reporting by Dhara RanasingheEditing by Mark Heinrich

Our Standards: The Thomson Reuters Trust Principles.

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