BR: Sterling edges up versus dollar but market wary before UK data
LONDON: Sterling edged up against the dollar on Tuesday but fell against the euro and was seen as vulnerable to concerns over global growth and upcoming data that may highlight Britain's own economic weakness.
Figures due at 0830 GMT are expected to show UK annual CPI inflation staying high at 2.8 percent.
Some analysts said a strong reading could give the pound a small boost as it may dampen the chances of more quantitative easing from the Bank of England.
But any impact was expected to be limited, given that high inflation is also weighing on economic growth. Economists say it remains a close call whether first-quarter gross domestic product numbers next week show Britain is back in recession.
Analysts also said the focus of participants in the foreign exchange market was elsewhere for now, with gold prices recovering modestly after a huge fall on Monday in the wake of weak Chinese data.
Global growth concerns usually boost safe-haven currencies like the Japanese yen and dollar and weigh on riskier currencies, including sterling.
"For sterling there is inflation data coming up, but the focus for the market is more global at the moment so it's unlikely to have much impact," said Nawaz Ali, market analyst at Western Union Business Solutions.
"I'd expect to see a few weeks of rangebound trading, with not much happening until we get GDP data on April 25." He saw sterling in a range between $1.51 and $1.54.
Sterling was up 0.1 percent against the dollar at $1.5304 , recovering from a low of $1.5269 hit on Monday.
However, it remained well below last week's peak of $1.5412, which was its highest level since Feb. 20.
The euro was up 0.15 percent at 85.39 pence, staying comfortably above the April 1 low of 84.115 pence.
Traders expected to see good offers around the $1.54 mark, with the pound likely to struggle to break above $1.5423, the 38.2 percent retracement of its fall from the 2013 peak of $1.6380 hit in January and the March low of $1.4832.
Other data this week include employment and retail sales figures. Bank of England minutes on Wednesday will also be watched to see whether policymakers are nudging any closer to propping up the economy with more quantitative easing (QE), which is usually seen as negative for the pound.
A Reuters poll found that while the economy will narrowly skirt recession when the GDP data is released on April 25, growth is likely to be tepid.
