Sterling touched a 4-1/2 year low against the euro

Sterling touched a 4-1/2 year low against the euro and fell versus the dollar on Friday as fears of slowing economic growth and expectations of interest rate cuts continued to weigh on sentiment.

The pound has been under pressure versus the euro since the Bank of England last week signalled that interest rates are set to fall, hitting sterling's yield appeal.

Weaker than expected GDP data for the third quarter [ID:nONS003203] gave another reason for investors to sell the pound.

"GDP data was weaker than expected and investors are more worried about the outlook for the UK economy increasing expectations that the Bank of England may cut rates as soon as next month," said Johan Javeus, FX strategist at SEB Merchant Banking in Stockholm.

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