Sterling fell against the dollar and held steady versus the euro on Tuesday, tracking a rebounding greenback as investors waited for fresh UK data on consumer sentiment and the housing market out this week. Investors will look to Bank of England mortgage and consumer credit data for May on Wednesday and the Nationwide house price survey for June on Thursday for clues on the future path of interest rates.
Recent weak UK data has added to market speculation the next interest rate move in Britain would be a cut. Earlier this month, the central bank kept rates unchanged at 4.75 percent for the 10th month running.
"The negative data hasn't had such a negative impact on sterling. The market has already price in a rate cut," said Paul Mackel, currency strategist at ABN Amro.
"The numbers would have to be bad enough to alter interest rate expectations."
At 1350 GMT, sterling was down 0.6 percent versus the dollar at $1.8175 tracking the dollar as it rose to an 8-1/2 month high versus the yen and gained about 0.6 percent versus the euro.
Against the euro, the pound was steady at 66.45 pence after hitting a 10-month high of 66.07 pence last week.