Sterling slumps versus dollar

Sterling slumped to its lowest versus the dollar in nearly three months on Thursday, sliding below the key $1.60 level on speculation the Bank of England may be more inclined towards additional quantitative easing than previously thought. The pound dropped below its 200-day moving average - at around $1.6029 - for the first time since early January, leaving it open to further losses.
Sterling also came under pressure as investors cut exposure to riskier assets after Federal Reserve Chairman Ben Bernanke cut the Fed's US growth forecast and on persistent uncertainty about Greece's debt crisis. "Risk-off sentiment and the increased possibility of more QE in the UK is encouraging sterling lower against the dollar," said Jeremy Stretch, currency strategist at CIBC.
The pound was last down 0.6 percent at $1.5969, having broken below options barriers at $1.5950 to hit a low of $1.5938, just one pip above its late March low. Traders cited talk of another barrier at $1.5900. Sterling gained against the euro, however, as the single currency suffered broadly due to concerns about how the Greek debt crisis could be resolved. The euro was down 0.8 percent at 88.55 pence, retreating from a two-week high of 89.53 pence hit on Wednesday. The pound hit a three-month low against the yen around 128.50 yen and plumbed a record trough versus the Swiss franc at around 1.3359 francs.