The pound was on track to record its worst week in more than a month, after a senior Bank of England (BoE) policymaker suggested a weaker sterling could help Britain fix its current account deficit.

Having lost ground in the previous session, after the BoE opted to leave interest rates unchanged, the pound extended its losses on Friday (16 September). By mid-afternoon, the UK currency was 0.48% lower against the dollar, exchanging hands at $1.3171, and fell 0.37% against the euro to €1.1729.

Earlier in the day, Kristin Forbes, an external member of the BoE's Monetary Policy Committee, argued the pound's sharp depreciation in the three months since Britain's referendum on the European Union should significantly narrow the country's deficit.

"Sterling's depreciation should improve the UK's net foreign asset position by over 20% of GDP," she told an audience in Paris.

"That's a big improvement in the UK's net international asset position and that should alleviate concerns by international investors about the UK's ability to pay on its net foreign asset position."

Meanwhile, writing in IBTimes UK, Kit Juckes, head of forex at Société Générale, suggested the pound could fall even further in the near future.

"The Bank of England has already cut policy rates from 0.5% to 0.25%, and there's more to come from both the Bank and the pound over the next year," he said.

"A 5% fall from here would take the pound close to €1.10, and we could see it fall below $1.25 as the Federal Reserve edges rates higher."

Elsewhere, the dollar dipped slightly against the yen, losing 0.09% to fetch ¥102.01, as the uncertainty surrounding next week's meetings of the Federal Reserve and the Bank of Japan lingered on.

The greenback, however, gained ground against the euro, climbing 0.1% to 0.8900 euro cents.

"Against a backdrop of deteriorating data, the Fed is unlikely to raise interest rates," said Fawad Razaqzada, market analyst,

"However, that does not necessarily mean the dollar will fall off a cliff in the coming days. After all, central banks elsewhere are even more dovish than the Fed. What's more, with the probability of the Fed tightening in September having fallen sharply in recent times, the market is probably no longer positioned for a rate rise."