Pound Drops to 3-Month Low Versus Dollar as Trade Deficit Widens
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The pound fell to a three-month low versus the dollar after a government report showed the trade deficit widened more than economists forecast, fueling bets the central bank will need to add more stimulus to spur growth.
Sterling declined versus all 16 of its major counterparts and gilts advanced after the British Retail Consortium said shop-price inflation slowed to a 16-month low in December. The Bank of England will keep its bond-purchase target unchanged at 275 billion pounds ($421 billion) at a policy meeting tomorrow, according to a Bloomberg News survey.