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Sterling fell against the US dollar this morning, as rising liquidity constrains in the banking system encouraged investors to reduce their exposure to risky currencies.
'Increasing strains in money markets have hit sentiment and that's been bad for sterling versus the dollar,' said Kenneth Broux of Lloyds Banking Group. Sterling has also been pressured by a smaller-than-expected increase in UK mortgage approvals. Data released from the British Bankers' Association (BBA) showed that lenders granted 35,729 home loans in April, up from 35,044 the prior month but lower than Bloomberg's expectations for a rise to 37,000. 'Uncertainties about the impact of government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision-making,' David Dooks, director of statistics at the BBA, said in the statement.
