* Graphic: Sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
By Ritvik Carvalho and Jemima Kelly
LONDON, Feb 28 Sterling fell against the dollar
on Tuesday ahead of a speech by U.S. President Donald Trump and
as worries about Britain's future when it leaves the European
The pound fell to as low as $1.2384 on Monday, its
weakest in a fortnight, on reports that Scottish nationalists
were preparing to demand a fresh independence referendum, an
announcement possibly as early as March to coincide with the
government's plan to formally trigger Britain's exit from the
The currency stayed close to the low in choppy trade on
Tuesday afternoon in London, last trading 0.1 percent down at
$1.2428. Investors turned their focus to the United States,
where Trump was due to address a joint session of the U.S.
Despite the dollar weakening against most currencies ahead
of Trump's speech, which investors will watch closely for fresh
details on his economic plans, sterling was kept under pressure
by worries about the fallout from Brexit. It was down 0.4
percent at 84.45 pence per euro.
Scottish First Minister Nicola Sturgeon said on Tuesday that
the "sheer intransigence" of the British government over Brexit
could lead to a second referendum on independence.
"While there is no firm evidence to suggest that Scotland is
on track to leave the Union, on the back of Brexit-related
uncertainty we continue to see sterling as a vulnerable
currency," Rabobank strategists wrote in a note to clients.
ING currency strategist Viraj Patel described a possible
second independence referendum as one of a number of Brexit
"tail risks". But he said negotiations over Britain's exit from
the bloc - and not a possible Scottish exit - would be the key
driver of the pound in the months to come.
"Our economists just don't see Westminster accepting a
second referendum at least in the next 6 to 12 months," he said.
"They don't want to be battling on two fronts."
New Bank of England Deputy Governor Charlotte Hogg said on
Tuesday that her tolerance for above-target inflation would
depend on events, and that she would be willing to stand up to
Governor Mark Carney if she did not agree with him.
Surveys showed earlier on Tuesday that British consumer
morale sunk lower in February as rising inflation following last
year's Brexit vote made householders warier about the outlook
for their finances.
(Editing by Jeremy Gaunt)