LONDON: Sterling fell on Monday, with investors reacting cautiously to the arrival of a new governor at the Bank of England who they believe might ease policy more aggressively if the UK economy flags.
The Manufacturing sector purchasing managers index (PMI) for June and mortgage lending for May will be released later in the session and soft data could see sterling drop towards recent lows against the dollar and the euro.
New BoE chief Mark Carney chairs his first meeting of the bank's monetary policy committee (MPC) on Thursday.
The committee is widely expected not to change interest rates or its quantitative easing policy. But analysts said Carney might introduce new measures, such as issuing forward guidance on the policy outlook perhaps as early as August.
Sterling eased to $1.5205, not far from a four-week low of $1.5165 hit on Friday. The currency suffered its second straight week of losses after data last week showed year-on-year first quarter economic growth was cut in half while the current account deficit widened.
The euro was up 0.3 to 85.75 pence, not far from a one-month high of 85.985 pence.
"We've had a couple of good manufacturing sector PMIs, so it wouldn't be surprising if we see a pullback today," said Daragh Maher, currency strategist at HSBC.
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