Pound Weakens After Hitting 7-Year High

The pound weakened versus the dollar on speculation a rally that took Britain’s currency to a five-year high may fade as the Federal Reserve moves toward raising interest rates. Sterling also declined after data showed bullish bets as measured by the Commodity Futures Trading Commission had climbed to the highest level since 2007, reducing the potential for fresh buying impetus. Predictions said the U.K. central bank will leave its benchmark rate at a record-low 0.5% on July 10. The Fed is winding down its asset purchase program. Speculation that the Bank of England will be the first major central bank to increase rates helped push the pound 11.3 percent stronger in the past year, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro rose 1.5 percent, while the dollar fell 4.9%. Sterling slipped 0.1% to $1.7140 after rising to $1.7180 on July 4, the highest level since October 2008. It rose 0.7% last week, completing the longest run of weekly gains since the period ended September 21, 2012.

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