“The pound fell toward the weakest level in a month against the dollar after an industry report showed U.K. retail sales slowed in December, adding to signs Britain’s economy is lagging behind U.S. growth.
Sterling depreciated against all except two of its 16 major counterparts before a Bank of England meeting this week at which policy makers are forecast to keep interest rates at a record low as it struggles to stoke a recovery. The U.K. economy shrank 0.1 percent last year, while the U.S. expanded 2.2 percent, according to a Bloomberg News surveys. Gilts rose as the Debt Management Office sold 1.5 billion pounds ($2.41 billion) of bonds due in December 2030.
“U.S. growth is outperforming U.K. to such an extent that the last time we saw this kind of a differential was pretty much in the 1980s,” said Peter Kinsella, a senior foreign-exchange strategist at Commerzbank AG in London. “Definitely you’ll see lower levels in cable over the course of the year,” he said, referring to the pound-dollar exchange rate.
The pound dropped 0.1 percent to $1.6096 at 12:34 p.m. London time after falling to $1.6010 on Jan. 4, the lowest level since Dec. 7. The U.K. currency also declined 0.1 percent to 81.50 pence per euro.
Sterling has weakened 0.4 percent in the past six months, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The euro gained 2.7 percent and the dollar fell 4.5 percent…”
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