Pound heads for sixth week of losses against the euro

Versus the dollar the pound slipped 0.4% to $1.2616 , with most of the losses following the release of U.S. retail sales data that triggered some buying of the greenback.

Some think sterling's selloff has gone too far.

"Recent sterling weakness has been overdone, in our view, because markets are pricing in too high a risk of a no-deal Brexit in October," UBS wealth management said in a note.

UBS said "lingering uncertainty" should keep the pound between 84 pence and 90 pence, with buying and selling opportunities when the currency nears the edges of that range.

It retained its three-, six- and 12-month euro/sterling forecasts at 87 pence per euro.

Nomura analyst Jordan Rochester said he is taking profits on a short position on the pound.

"It's because all the negatives are known: GBP rallying on the smallest of non-events makes us wonder what would happen if we had some "positive" news. We would likely suffer from a position squeeze that for now we don't want to be a part of," he wrote.