Pound drops to two-week low, investors await signal

London - The pound reached its weakest level in almost two weeks against the dollar amid speculation the Bank of England (BoE) will signal this week that it’s in no rush to raise interest rates.

That may leave sterling vulnerable to losses against its US peer, which is being supported by speculation the Federal Reserve will raise interest rates in December, and less attractive against the euro, even as the European Central Bank considers further easing.

BOE Governor Mark Carney is due to testify to lawmakers about his bank’s latest Inflation Report on Tuesday. That report, which came out November 5, marked a change in tone from policy makers who said the economy wasn’t ready for higher rates, having spent months suggesting they were headed higher.

“Sterling has been really a buffer between expectations about the ECB and expectations with respect to the Fed,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London.

“The overwhelming message of the Inflation Report was a dovish one. I suspect the level of euro- sterling in particular is really crucial to the tone that Carney decides to give.”

The pound fell 0.3% to $1.5149 as of 12:35, adding to a 0.7% drop from Friday. The British currency earlier dropped to as low as $1.5141, the weakest level since November 11. It was little changed at 70.13 pence per euro, after jumping 1.8% over the past two weeks.

A Deutsche Bank AG trade-weighted measure of the pound has declined the past three days, having climbed last week to to its strongest level since August 18.