Sterling hit a new 19-month low against the dollar today, extending steep losses made in the previous session, as the US currency rallied ahead of non-farm payrolls data later in the session.
Yesterday’s bomb attacks on the London transport network continued to weigh on the pound, with the market selling sterling on news of a temporary evacuation of London’s Euston station.
Although the station quickly reopened, the price action underlined the heightened risk sensitivity in the UK capital, despite the fact that business was getting back to normal in London’s financial district following the bombings.
The Bank of England also sought to scotch market rumours that it was to hold an emergency meeting of its Monetary Policy Committee in the wake of the attacks.
Sterling fell 0.2 per cent against the dollar to $1.7370, having hit $1.7363, its weakest level since December 2003, earlier in the session.
Elsewhere markets were coming to terms with the attacks on London, with traditional safe-haven currency the Swiss franc losing ground against the dollar and returning to levels seen before the incident. The dollar gained 0.7 per cent against the Swiss franc to $1.3045, having hit a six-week low of $1.2850 yesterday.
The dollar also strengthened against the euro and the yen as the market geared up for US non-farm payroll data, due out at 12.30pm. The greenback gained 0.4 per cent against the euro to $1.1904 and 0.4 per cent against the yen to Yen112.35.
Investors were expecting payrolls for June to show a healthy increase of 200,000, compared with May’s rise of 78,000.