Sterling hovers near one-month low versus dollar

LONDON: Sterling hovered near a one-month low versus the dollar on Thursday as concerns about global growth and Spain weighed on perceived riskier currencies, though it edged up against the euro.

The pound was vulnerable after Standard & Poor's cut Spain's rating to BBB-minus, just above junk status, while concerns remained over when Madrid will apply for a bailout and about company earnings being hit by a global slowdown.

 The pound was steady on the day at $1.6012, staying near a low of $1.5975 hit on Tuesday, its weakest since Sept. 10.

 "There is no economic data out of the UK today and sterling will look vulnerable against the dollar if there is more weakness in the euro," said Kit Juckes, currency strategist at Societe Generale.

"The fall has run out of momentum around the psychological $1.60 level. If it does break below there the fall could gather momentum."

Further weakness would see the pound target chart support at $1.5960, a low reached on Sept. 10 and the 38.2 percent retracement of sterling's rally from its low in July to its high of $1.6310 on Sept. 21.

But the pound gained slightly against the euro, which was down 0.1 percent at 80.36 pence, off a peak of 81.00 pence reached on Monday, its strongest in nearly four weeks.

Concerns about a weak UK economy and the prospect of the Bank of England opting to extend its quantitative easing programme in November were expected to keep sterling under pressure against the dollar and cap any gains versus the euro.

BoE policymaker Martin Weale told the Daily Mail newspaper he was concerned another round of QE may not be "compatible" with the Bank of England's inflation target but he also warned Britain was at risk of a 'triple-dip' recession.

But traders said bids around $1.5980 could limit sterling's losses in the short term while a reported options expiry at $1.6000 later on Thursday may keep the pound close to that level.

The euro also faced strong chart resistance at the mid-September peak of 81.14 pence and the 200-day moving average at 81.18 pence.