Sterling fell to its lowest in nearly eight weeks against a firmer euro on Tuesday as Bank of England policymakers kept alive the possibility of more monetary easing while data showed lower annual first quarter growth. The euro rose as high as 89.80 pence, paving the way for a break of the key 90 pence level, while sterling also hit a record low versus the safe-haven Swiss franc, pushing its trade-weighted index to a 13-month low.
The pound briefly touched a five-month low against the dollar, helping push its trade-weighted index to its lowest in 13 months, before rising back above $1.60 as the dollar came under pressure after weak US confidence data. Data on Tuesday confirmed Britain's economy grew a tepid 0.5 percent quarter-on-quarter in the first quarter, while annual growth was revised to 1.6 percent from 1.8 and the current account deficit narrowed much less than forecast.
The euro was last up 0.4 percent at 89.72 pence. Sentiment towards the single currency was helped as Portugal said it planned to be scrupulous in meeting terms of a financial bailout. The dollar was last up 0.1 percent at $1.6007, comfortably above an earlier five-month low of $1.5912. Earlier losses were hampered by reported demand from sovereign names ahead of an options barrier at $1.5900, traders said. Sterling's trade-weighted index fell to 78.0, its weakest since late May 2010, helped as the pound hit another record low versus the Swiss franc.
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