LONDON: Sterling edged down on Monday as traders continued to be cautious over events in Ukraine and Gaza and as data added to a sense that Britain's economic recovery might be coming off the boil.
Numbers released on Monday showed British consumer confidence dipped for the first time in 2014 in June, with spending on gas and electricity around 2.5 percent lower than a year ago.
Separate data showed asking prices for British houses had fallen for the first time this year.
Concerned about Ukraine and Gaza, investors have pulled money out of sterling, putting it instead into traditionally safer currencies such as the yen, Swiss franc and the dollar.
Sterling was down 0.1 percent against the dollar at $1.7075, over a cent lower than last week's near six-year high of $1.7192 .
"It doesn't seem very comfortable at $1.71 and we've seen it fall off quite sharply, but I think that's more about a slight dollar move," said Kathleen Brooks, research director at Forex.com.
"Also I think we're a bit risk-off," Brooks said.
Against the euro, the pound was flat 79.20 pence .
Traders are awaiting minutes on Wednesday from the latest meeting of the Bank of England's Monetary Policy Committee for any signs of when a first interest rate hike in seven years might happen. The market is pricing in a slight chance that will come in November.
Data last week showed UK inflation in June at a higher-than-expected 1.9 percent, just shy of the BoE's 2 percent target, prompting investors to increase bets that the rate rise will come before the end of the year.
But some traders said that despite that expectation, there were a number of risks that could weigh on sterling and could inject the market with a dose of a volatility.
"Tailwinds from BoE hikes may not be enough to offset growing downside risks (for sterling). Investor concerns about the Scottish referendum in September, general elections next May and a potential ... "Brexit" (Britain leaving the European Union) could ... fuel FX implied volatility," analysts from Citigroup said in a research note.
Comments
Comments are closed for this article.