Sterling weakens on banks, upcoming data

Sterling was weaker in late morning trade in London on Monday as the UK financial sector continued to be rocked by the subprime crisis.

The pound dropped 0.5 percent to £0.6944 against the euro, while it fell 0.6 percent to $1.9960 in relation to the US dollar, and was down 1 percent to ¥229.25 versus the yen.

Besides troubles in the banking sector, sterling was affected by hesitation before the release of the latest Bank of England meeting minutes, new consumer price index data and new figures on retail sales, all due later in the week.

The US dollar continued to remain near record lows versus the shared currency, trading about even at $1.3870 ahead of Tuesday’s meeting of the Federal Reserve to decide what to do with US interest rates, while both the Australian and New Zealand dollars fell by 0.2 percent and 0.4 percent respectively versus the greenback to $0.8397 and $0.7097.

The yen strengthened as investors once again stepped away from the purchase of high-risk investments, with the Japanese currency adding 0.5 percent versus both the US dollar and the euro, to ¥114.85 and ¥159.30 respectively, while it gained 0.8 percent to ¥81.51 in relation to the New Zealand dollar.

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