The British pound had its biggest quarterly drop against the US dollar in more than four years as the economy’s contraction in the three months through December last year fueled concern of an unprecedented triple-dip recession.
Sterling declined against all but two of its 16 major counterparts in the quarter ended on Thursday. The currency trimmed declines after minutes of the Bank of England’s most recent policy meeting damped speculation for more asset purchases and as Cyprus’ financial crisis boosted demand for UK assets.
The pound slipped 6.7 percent in the first quarter to US$1.5172 on Thursday, after dropping on March 12 to US$1.4832, the weakest since June 2010. The British currency slipped 3.9 percent against the euro in the past three months to ￡0.8450.
The euro gained the most this week versus the US dollar as falling Spanish and Italian government bond yields signaled Cyprus’ banking crisis may be contained.
Europe’s common currency rose from a four-month low to the US dollar as Cyprus’ banks opened, with rules curbing access to cash.
The euro rose 0.3 percent to US$1.2816 on Thursday.