Sterling hit a 1-1/2 month low versus the safe haven dollar yesterday and also fell against the euro with investors bearish on the pound after the Bank of England cut UK growth forecasts.
The euro has continued to struggle on worries about Greece and fragility in the Spanish banking sector. However, the euro made small gains against the pound yesterday as investors are concerned after the Bank of England growth forecasts.
Safe-haven demand for the dollar has pushed it towards a one and a half month high against the pound as investors are flocking towards the highly liquid dollar. The greenback gained around 0.65% against the pound yesterday and is forecast to continue strengthening.