LONDON: Sterling hovered near a two-week low against the dollar on Wednesday, vulnerable to concerns about the risk of another recession in Britain and the prospect of more monetary easing. The pound was last steady at $1.5101, having earlier dropped to $1.5075, its lowest since March 20. Traders reported offers above $1.5120, with some keen to sell the currency on any rally. More losses could see the pound target $1.5026, the March 20 low, although solid chart support was expected above $1.5000. Stop-loss sell orders were reported around $1.5050, traders said. Sterling fell on Tuesday after weak UK manufacturing activity data highlighted economic fragility and analysts said market players were likely to be wary before a Bank of England meeting on Thursday. A Reuters poll showed economists expect the central bank will opt for further asset purchases under its quantitative easing (QE) programme to boost the economy, although most do not expect them to do this until May. "The focus is on fundamentals at the moment and yesterday's data was grim, underscoring the view that persistently weak UK data should persuade more members of the Monetary Policy Committee (MPC) to back more easing," said Nawaz Ali, market analyst at Western Union Business Solutions. He said more QE as early as this week was unlikely. However, traders would be wary that this was a risk given that three of the BoE's nine MPC members have voted for more easing for the last two months. QE is typically negative for the pound because it increases the supply of a currency. Sterling could fall towards $1.50, Ali said, although he expected any drop to be limited, with trading rangebound probably until the release of first quarter gross domestic product data later this month. The data will reveal whether or not the UK has dropped into its third recession in less than five years. A purchasing managers' survey for construction was due for release at 0830 GMT and was forecast to show a slight improvement. It was expected to have limited impact on the pound, however, because the market is more focused on services PMI data and the BoE decision on Thursday, analysts said. "For today, sterling looks likely to remain rangebound ahead of tomorrow's key events; sterling/dollar should be well supported below $1.50 and the $1.5250/60 area should provide resistance to the topside," analysts at Lloyds said in a note. The pound edged higher against the euro, which dipped on caution before a European Central Bank meeting on Thursday where President Mario Draghi could highlight a bleak outlook for the euro zone economy. The euro was down 0.2 percent at 84.71 pence, though it stayed comfortably above Monday's low of 84.115 pence.

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