Market News
Sterling at four month low against euro as UK and euro zone rates diverge - REUTERS
LONDON, July 25 (Reuters) - The pound dropped to its weakest level against the euro in four months on Friday as a weekly decline in gilt yields on soft British data contrasted with higher European yields on expectations the European Central Bank is done with rate cuts.
The euro reached as high as 87.27 pence, up 0.24% and approaching its April 11 peak of 87.38 pence, hit at the height of tariff-induced market turmoil. A break past that would take the euro to its highest since late 2023.
The pound was also down 0.4% against the dollar at $1.3456.
Data on Friday showed British retail sales for June were slightly below analysts' expectations, albeit rebounding from a sharp drop in May.
They followed figures on Thursday showing UK business activity grew only weakly in July and employers cut jobs at the fastest pace in five months.
The jobs data is the most important aspect of this, said Derek Halpenny, head of research global markets EMEA at MUFG, as rate setters at the Bank of England are most focused on the labour market.
