LONDON: Sterling slipped against a broadly stronger dollar on Monday, little moved by Friday's attacks in Paris after a rocky week marked by rising concerns over the chances of Britain voting to leave the European Union.
The pound had been pegged back on Friday by comments from a senior Bank of England policymaker who said an interest rate hike by the U.S. Federal Reserve would not automatically lead to a response in Britain.
That bent towards relatively looser policy from the Bank, allied to the concerns around Britain's huge current account deficit and the planned referendum on EU membership, have turned some major banks against sterling in the past month.
Some said this week's data readouts would undermine it further.
"With headline inflation likely to remain negative and retail sales falling on the back of last month's stunning print, we expect the data-sensitive GBP to underperform this week," analysts from Dutch bank ING said in a morning note.
Inflation numbers are due on Tuesday and forecast by Reuters polling to show a 0.1 percent fall in prices in annual terms. Retail sales are due on Thursday, forecast to rise 4.2 percent year on year.
Others are more positive. Lee Hardman, currency economist with Bank of Tokyo-Mitsubishi in London, underlined that the BoE is still the only major central bank likely to follow the Fed in raising rates any time soon.
"Our view is that the fundamentals in the UK are still broadly supportive for the pound," he said. "Pricing on a rise in rates by the Bank of England looks to have gone too far out, we still think they will move sometime in the middle of next year."
Sterling fell 0.3 percent to $1.5198, holding in the middle of the past week's ranges. Against the euro, it traded 0.1 percent stronger at 70.54 pence, having hit a three-month high of 70.245 pence in Asian trade.
Hardman said he had a target of 68-69 pence per euro into the end of the year, strengthening to 65 pence in the middle of next year.
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