Sterling's Slump: British Currency Faces Economic Headwinds

The British pound struggled against the dollar, marking its worst week since November, amid a slowdown in the UK's economy. Factors include a dovish Bank of England, declining mortgage approvals, and concerns over gas prices. Sterling finished the week lower despite previous strength against the greenback.

The British pound faced a significant downturn against the US dollar, struggling at the end of the week to recover ground as it encountered its sharpest decline since November. Recent economic data further highlighted a slowdown in the UK's economic momentum.

On Friday, the pound saw a modest increase of 0.1% to $1.2395, following a sharp drop of 1.16% on Thursday. The currency remained near April's lows and seemed poised to close the week 1.4% down, reflecting broader global trends where currencies like the euro also suffered substantial losses against a rising dollar.

A pessimistic economic forecast for the UK, alongside cautious signals from the Bank of England, weighed heavily on sterling, despite its earlier dominance as the top-performing G10 currency against the dollar in the prior year. The situation was exacerbated by falling mortgage approvals and concerns over increasing wholesale gas prices.

(With inputs from agencies.)