Sterling slips against dollar

Sterling inched down against the dollar on Thursday after US Federal Reserve policymakers said they were on track to raise interest rates this year, easing investor worries that rates will stay at their record lows into 2016.
Earlier, forecast-beating British retail sales data had lifted the pound to a one-week peak of $1.4995. But that was overshadowed as the dollar rebounded later on Thursday.
The dollar has struggled in recent days after a spate of weaker-than-expected data and as investors have pushed back their expectations of when interest rates would rise in the wake of a dovish steer from the Fed last week.
But at separate events on Thursday, St. Louis Fed President James Bullard and Atlanta Fed President Dennis Lockhart said that an adjustment away from ultra-loose monetary policy might be needed in light of the US economy's steady improvement since the 2007-2009 financial crisis.
The dollar was also boosted on Thursday by US data, which showed the number of Americans filing new claims for jobless benefits fell more than expected last week while activity in the services sector hit a six-month high in March.
By 1630 GMT, sterling was trading at $1.4850, down 0.2 percent on the day, as the greenback gained across the board.
"Really the dollar is dominating in G10 FX at the moment," said Michael Sneyd, FX strategist at BNP Paribas in London. "And even though the UK data continues to be strong, the market is putting less focus on that with the upcoming election risk."
Against the euro, the pound was up 0.3 percent at 73.49 pence. That move could largely be attributed to euro weakness against the dollar, analysts said.
Traders said any gains in the pound are unlikely to hold if uncertainty related to a national election keeps rising. Britain votes on May 7 and the latest opinion polls point to a hung parliament, in which no single party can form a government on its own.
Sterling has also been hurt as investors pushed back expectations of interest rate hikes amid speculation that inflation in Britain will stay low for some time to come, allowing the Bank of England to keep rates lower for longer.
"It's not clear though whether economics is dominating the pound nowadays or politics," said Marshall Gittler, head of FX strategy at IronFX Global.
BoE Chief Economist Andy Haldane said last week the bank should be ready to cut rates further if inflation looked likely to stay below its 2 percent target. The next policy move was as likely to be a cut in rates as a hike, he said.