Sterling hit two week lows on Thursday after giving up all its post-election gains on fears that Britain may still leave the European Union without a trade deal at the end of next year.

Market optimism following the Conservative Party's decisive win in last week's general election has waned after Prime Minister Boris Johnson set a hard deadline of December 2020 to agree a trade deal with the EU, risking another no-deal Brexit cliff-edge if an agreement isn't reached.

The Bank of England kept interest rates on hold on Thursday, saying it was too soon to gauge whether Johnson's election victory would lift the Brexit uncertainty that has hung over the economy.

The pound fell following the meeting, touching a two-week low below $1.30 and was last down 0.5% at $1.3025, far below the $1.35 peak hit following last Thursday's election. Against the euro it was last down 0.5% to 85.39 pence.

Source : Reuters