Sterling extends slide versus euro

Sterling fell to a four-week low against a broadly stronger euro on Thursday, hurt by dovish comments from a UK policymaker which added weight to the view domestic interest rates will stay on hold for some time. The euro rose to 88.53 pence, past the May 6 high of 88.47 pence, as the pound extended falls suffered the previous day after surprisingly weak manufacturing data.
The euro was also bolstered by Greece agreeing to new measures to cut its deficit. Euro/sterling was last up 0.8 percent at 88.40 pence. The next target is 88.78 pence, the 61.8 percent retracement of the fall from 90.43 pence in early May to the late May low of 86.11 pence. The single currency could further extend its gains if it closes above its 55-day moving average at around 87.91 pence. Sterling was flat against a weak dollar at $1.6327, erasing gains made earlier in the session after a purchasing managers' survey showed UK construction activity grew more than expected last month. Stops are cited above $1.6440.