Sterling slides as nervy traders cash in

Jake Cordell
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The sun sets on a mixed week for sterling
The sun sets on a mixed week for sterling (Source: Getty)

The pound has tumbled against both the dollar and the euro this afternoon, dampening an otherwise strong week for the currency.

After strong post-referendum inflation and retail sales figures had put some steam behind sterling on Wednesday and Thursday, traders started to reassess the dizzying heights of $1.31 and €1.16.

Against the US dollar, the pound lost 1.1 per cent after a sharp plunge in afternoon trading to stand at $1.3029. Sterling fared slightly better against the euro, losing 0.7 per cent to enter the final few hours of the week at €1.1512.

Read more: Sterling's post-Brexit slide wasn't the worst ever

The currency is now hovering less than half a cent above its three-year low against the euro, and two cents higher than a 31-year low against the dollar - both reached on Monday.

Despite weak data out on public finances this morning, analysts said they could not find a specific reason for the lunchtime slide, suggesting it could simply be a flurry of end-of-week sellers driving the pound down.

"It looks like quite a sharp drop ... although I can't see that this has coincided with data or commentary elsewhere. So I think these moves could be technically driven in this case, with support for the pound giving way as it approached $1.31," said Chris Saint, senior analyst at Hargreaves Lansdown.

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