LONDON: Sterling drifted lower on Tuesday with testimony by Bank of England Governor Mark Carney in parliament likely to dominate morning trade late.
The pound has shown more resilience against the dollar in the past week but is still 9 percent down from this year's peak of $1.71 hit in July, driven back by political risk and a retreat in forecasts of when the BoE will raise interest rates.
BMO strategist Stephen Gallo said he expected Carney to take a cautious line but to support the pound somewhat by pointing to signs of more pressure coming to bear on wages, the missing ingredient in Britain's economic upturn so far. Carney starts speaking at 1000 GMT.
Technical analysts from Commerzbank said that the pound looked to have established a bottom at $1.5592 last week, although that might not be enough to hold it. Sterling was around 0.1 percent against both the euro and dollar at respectively 79.32 and $1.5679.
Gallo has sterling falling to $1.53 over the next three months, although he said that did not yet reflect the political concerns around an election next May which look set to weigh on the pound going forward.
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