Sterling lost ground against the euro on Friday, and has dipped below 1.09 in trading this morning

Sterling gave back recent gains against the euro on Friday, losing 0.3% as risk aversion weighed heavily on the fragile UK currency.

  • Sterling struggled in the morning as investor’s booked profits after the pound’s gains against the euro on Thursday, but trade was initially range bound ahead of US payrolls data.
  • The pound also failed to gain traction after a Nationwide housing market survey showed prices were steady on the year in September, the first time since March that prices have not fallen on a year-on-year basis.
  • In the afternoon, US payrolls data disappointed expectations, justifying the rise in risk aversion in the market and sending global equities spiralling further downward.
  • Indeed, the FTSE 100 went back below the psychological 5000 level, which was particularly damaging for the pound
  • In trading this morning the price has continued to climb in the single currency’s favour, though sterling may find support should UK services meet expectations and reveal a stronger month on month figure at 09:30BST.