LONDON: Sterling traded near a three-week low against the dollar on Thursday as markets remained wary about the prospects of more stimulus from the Bank of England to support the economy.
The pound lost ground against the dollar in the previous session after central banker Paul Tucker indicated interest rate hikes were still some way off, while fellow policymaker David Miles reiterated his calls for more stimulus.
Sterling traded flat at $1.5316, not far from Wednesday's trough of $1.5297, which was its lowest since June 5. Technical support was cited around its 100-day moving average of $1.5308.
Analysts said currencies could see some choppy trading due to month- and quarter-end demand.
The UK's final growth numbers and current account data for the first quarter are due at 0830 GMT. GDP data, if revised significantly higher, could provide sterling with some support, strategists said.
"Data this morning could give sterling a bit of a lift... but for the rest of the week it is much more the dollar and month-end flows that would determine where sterling is headed," said Simon Smith, chief economist at FXPRO.
"The bigger picture still is that of sterling moving lower as we are in a situation where investors are anticipating a step back in the pace of stimulus by the Fed, at the same time thinking of more QE from the BoE later in the year."
The pound was likely to suffer further losses against the dollar as prospects of the US Federal Reserve paring back its asset-buying have pushed up the benchmark 10-year US Treasury yield, with the spread over 10-year gilts , pointing in favour of the dollar.
The pound was flat against the euro at 84.98 pence.
The single currency faced renewed pressure on growing concerns about the euro zone economy with ECB President Mario Draghi flagging downside risks to growth and saying monetary policy will stay accommodative. This could see sterling gain against the euro.
"We already expect (UK) growth to outperform core euro zone economies and confirmation of current trends would relieve pressure on BoE to deliver further stimulus," analysts at UBS said in a note, adding that sterling could, however, still face headwinds from the rising dollar.
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