| LONDON, Sept 30
LONDON, Sept 30 Sterling stayed below $1.30 on
Friday and was on track for a fifth consecutive quarter of
losses - the currency's worst run since 1984.
The pound plunged to a 31-year low after Britain voted to
leave the European Union, falling as low as $1.28 early
in the third quarter, having already weakened in the run-up to
the June referendum on worries about its outcome.
Sterling is now trading more than 40 U.S. cents - or 25
percent - lower than the six-year highs it reached in mid-2014,
as expectations for the Bank of England to hike interest rates
have dried up.
Last month the BoE cut its key interest rate to another
record low and relaunched an asset-purchase programme in an
effort to cushion the blow dealt by the vote for Brexit, and
some expect it to ease policy again before the end of the year.
Data released early on Friday showed British consumer morale
rocketed back to pre-Brexit levels in September, confounding
expectations that the vote to leave the EU would wreak more
lasting damage on Britons' willingness to spend.
"The good news is that from the perspective of UK consumers,
the Brexit shock has been fleeting," wrote Bank of
Tokyo-Mitsubishi UFJ currency strategist Derek Halpenny.
"Less good was the Lloyds Business Barometer Index, which
did increase but remains well below the pre-Brexit level and
understandably reflects the ongoing concerns over how business
with Europe will be conducted going forward."
Sterling traded down 0.1 percent on the day by 0805 GMT at
$1.2954, ahead of second-quarter GDP data due at 0830 GMT. It
was on track for an almost 3 percent quarterly loss.
Against the euro, which was down against most currencies on
the back of worries about the health of Deutsche Bank, one of
Europe's biggest lenders, sterling climbed a third of a percent
to 85.26 pence, less than a penny away from a
six-week low of 87.16 pence hit on Monday.
Next week, manufacturing and production data should provide
indicators of the health of the British economy.
"So far, data have suggested that various worst-case
scenarios in the aftermath of the referendum have not
materialised," wrote BNP Paribas strategists in a research note.
"However, MPC (monetary policy committee) members have
signalled that they continue to expect a need for further easing
later this year, and our economics team expects data to paint a
picture of an economy that has effectively stalled. We view the
sterling as still vulnerable, and expect it to hold below $1.30
despite broader dollar weakness."
(Editing by Dominic Evans)