LONDON, Aug 20 - Sterling touched a new one month low against a robust dollar on Friday and also slipped to a one month low against the Euro as global risk aversion propelled investors toward currencies considered safer.
Risk currencies such as sterling have taken a knock on worries this week that the Delta Coronavirus variant could derail the global recovery, boosting demand for the safe-haven dollar.
Concerns that major central banks such as the U.S. Federal Reserve will begin tapering its emergency stimulus just as growth slows has also undermined risk sentiment.
Data released on Friday showed that overall global retail sales unexpectedly fell sharply in the last month, but analysts said the pound was more likely to be driven by global risk sentiment than by the UK data.
Retail sales volumes in July from June dropped by 2.5%, official data showed. A Reuters poll of economists had pointed to a 0.4% month-on-month increase in July sales.
The British pound was recently traded at $1.3623, having touched a fresh one-month low at $1.3614.
For the week, sterling was down almost 1.8% and set to hit the greenback in two months with the biggest loss against sterling.
Sterling did also fall to a one-month low against the Euro at 85,82 pence and was marginally lower on the day.
It weakened almost 0.9% against the common currency this week, which means it has weakened about its biggest weekly drop since early April, according to Refinitiv data.
The markets being priced for Bank of England action in 2022 certainly the pound will remain vulnerable to an extension of risk-off which starts to result in investors questioning the ability of G-10 central banks to raise rates at all, Derek Halpenny, head of research, global markets EMEA from MUFG, said in a note.
But we don't think we are at that moment yet.