LONDON: Sterling recovered from a near three-week low against the dollar on Monday as comments by leading Brexit campaigner Boris Johnson added to an increasingly fraught debate over Britain's membership of the European Union.
With most major currencies steady, the pound traded less than 10 ticks away from the low of $1.4340 it hit after a batch of stronger economic data out of the United States on Friday boosted the dollar.
Compared to the previous close, it dipped 0.1 against both the euro and the dollar to 78.85 pence per euro and $1.4346.
Former London Mayor Johnson, whose joining of the "Out" campaign for June's referendum drove sterling to as low as $1.38 in February, has hit the headlines several times since starting a battle bus campaign last week.
He said in an interview over the weekend that the EU was following the path of Adolf Hitler and Napoleon by trying to create a European superstate, drawing criticism from one political opponent that he had "lost his moral compass".
Jacob Rees-Mogg, a Brexit-backing Conservative member of the parliamentary committee which scrutinises the Bank of England, also said that Governor Mark Carney should be fired after warning last week the vote was a large risk to growth.
"After some swings in the past month or so our short-term model shows the pound has fallen back to fairly valued after appearing expensive a few weeks ago," said Michael Sneyd, a currency strategist with BNP Paribas in London.
"Any swings in the polls could be the trigger for the next move. It hasn't really moved since Friday."
The pound has recovered solidly since falling 7 percent in the first months of the referendum campaign, but it dipped after Carney's warning on Thursday that the June 23 poll was the most significant risk to the Bank's growth forecasts.
In its quarterly inflation report, the BoE said sterling could weaken and unemployment would probably rise after a vote to leave the EU. Carney said that a "technical recession" was possible but was not the most likely scenario.
"The move in spot (on Friday) ... was a stark reminder how vulnerable the Pound can be to sentiment in the next few weeks," analysts from South African bank Investec said in a note.
"The weekend's political turns saw the pound open a little lower but soon retraced the move in what was a fairly quiet and rangebound overnight trading session."
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