2 Minutes Read (Updates with latest moves, milestones and analyst comment) (Reuters) – LONDON, July 8 (Reuters) – Sterling sank to its lowest level versus the euro in more than three weeks on Thursday, and it eased further against the dollar, amid a broader shift in currency markets that saw risky currencies fall and safe haven currencies rise. The pound plummeted along with other risk-correlated currencies such as the Australian and New Zealand dollars after minutes from the most recent Federal Reserve meeting revealed policymakers were leaning toward halting the central bank’s asset purchases as early as this year. “Cable made a hesitant attempt to hold above $1.38 yesterday, but risk aversion has prevailed today,” said Roberto Cobo Garcia, a BBVA FX analyst. The European Central Bank’s announcement of a new inflation target, which provided the euro a lift, added to sterling’s troubles on the day. By late afternoon trade, the pound had fallen to 86.18 pence per euro, its lowest level versus the euro since June 15. “Sterling is also losing ground against the euro due to its higher beta nature ahead of tomorrow’s batch of UK macro announcements,” Garcia said, adding that industrial production and May’s monthly GDP might be key for the pound’s short-term direction. By 1535 GMT, sterling had fallen 0.3 percent against the dollar, to $1.3758. Sterling has gained some support this week as a result of British Prime Minister Boris Johnson’s intentions to lift COVID-19 limits on social and economic freedom in England. However, investors are wary, as the government has cautioned that when restrictions are relaxed, the number of coronavirus infections could rise. Last month, British house prices rose at their fastest pace since 1988, but fewer homes were put on the market and buyer demand expanded more slowly as a tax benefit on property purchases came to an end, according to an industry study. Ritvik Carvalho contributed reporting. Mark Heinrich and William Maclean edited the piece./n
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