STERLING sank further against the dollar yesterday, as fears over a no-deal Brexit weighed and the US currency was boosted by its “safe haven” status amid turmoil on currency markets.
The euro came under pressure amid worries over the exposure of some mainland European banks to a plunge in the Turkish lira, which hit a record low against the dollar yesterday. In spite of its drop yesterday, the euro was still showing a gain over the week against embattled sterling.
The Turkish lira, which has plummeted this year, has been hit hard by worsening relations with the US. It has also been weighed down by worries over Turkish President Recep Tayyip Erdogan’s influence on monetary policy. US President Donald Trump yesterday pledged to hike tariffs on Turkish steel and aluminium.
Fears of a no-deal Brexit have haunted sterling this week. The pound was, at 5pm in London yesterday, trading around $1.2768, down 1.02 cents on its close on Thursday. Sterling had closed in London at $1.3019 on August 3, so was down more than 2.5 cents over the week.
The euro was trading around 89.33p at 5pm in London, down 0.56p on its Thursday close. However, it was up by 0.26p on its August 3 close of 89.07p,
Data yesterday from the Office for National Statistics showed a modest acceleration of UK growth in the three months to June, after expansion almost ground to a halt in the first quarter.
UK gross domestic product grew by 0.4 per cent quarter-on-quarter, in line with expectations. The UK economy expanded by only 0.2% in the first quarter. The ONS figures signal a sharp slowing of growth in June. UK manufacturing output tumbled 0.9% during the second quarter.
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