* 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, March 2 Sterling edged down to a
six-week low on Thursday against a dollar, boosted by
expectations of a March U.S. interest rate hike, while data
painted a mixed picture of Britain's economy.
A survey on Thursday showed Britain's construction industry
growing slightly in February but new orders slowed. That
followed Wednesday's marginally weaker-than-expected figures
from the manufacturing sector.
Sterling fell by 0.1 percent on the day to $1.2274 by 1630
GMT but was far more robust against the broadly stronger dollar
than a handful of other major currencies including the yen and
the Australian and New Zealand dollars.
The pound inched higher on the day to 85.68 pence per euro.
"Investors are very mindful of the inherent political risks
in the UK and the dollar-based interest rate resilience in the
U.S.," said Jeremy Stretch, head of currency strategy at CIBC
A Reuters poll on Thursday showed currency strategists
expect a slow, orderly decline in the pound once Britain
formally triggers Brexit talks. It has lost almost a fifth of
its value against the dollar since June's EU referendum.
A spokesman for Theresa May said on Thursday the Prime
Minister was clear that the legislation needed for her to
trigger formal divorce talks with the European Union should be
passed by parliament unamended, after its first version suffered
a defeat in the upper house on Wednesday.
"If she can trigger Brexit as per her deadline, it may push
sterling even lower as this will send the message that Theresa
May is in full control and her hard Brexit (prioritising
immigration control over single market access) is taking shape,"
said Think Markets market analyst Naeem Aslam.
He suggested a level of $1.18 for the pound in that
A number of major banks have made similar forecasts in the
past week, with the triggering of Article 50 talks on leaving
the EU another likely catalyst.
"We expect euro/sterling to move even higher in coming
months, ahead of and after the triggering of Article 50," wrote
currency strategists from Danske bank, who have 87 pence per
euro as their three-month projection.
"That said, euro/sterling is not only affected by political
uncertainty in the UK but also in Europe, not least due to the
French presidential election, which may put downward pressure on
euro/sterling if Marine Le Pen gains momentum in polls."
(Editing by Alison Williams and John Stonestreet)