Sterling continues surprise euro slide
Sterling completed a fifth weekly decline against the euro, its longest stretch of losses since September 2012 -- and a slide that most strategists didn't see coming.
Sterling dropped against the euro yesterday even after the European Central Bank signalled its willingness to expand monetary stimulus to combat the region's latest bout of disinflation.
For much of this year, until the recent weakening, Irish exporters had gained from the relative weakness of the euro on sales booked in Britain.
However, sterling's fortunes have deteriorated since getting a boost from the UK elections in May, when an improving economy prompted investors to anticipate an early interest-rate increase from the Bank of England.
"Sterling has taken quite a hefty whack," said Steve Barrow, head of Group-of-10 strategy at Standard Bank Group in London, who still sees the pound gaining about 10pc versus the euro in the next two years as UK growth outpaces its neighbors.
The pound slipped 0.4pc to 73.20 pence per euro by 4.30pm yesterday, leaving it down 0.7pc on the week.
It is already weaker than the 71 pence strategists predicted for the end of this quarter in a June 30 Bloomberg survey. (Bloomberg)