January 11, 2017 / 9:13 AM / 6 months ago

Sterling stays weak ahead, May to speak in parliament

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* Graphic: sterling and gilt yields bit.ly/2dgAXn1

* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh

By Jemima Kelly

LONDON, Jan 11 (Reuters) - Sterling edged towards a 10-week low against the dollar on Wednesday, kept under pressure by fears that Britain will undergo a "hard" exit from the EU in which access to the single market will play second fiddle to immigration controls.

The pound posted its worst day in three months against the dollar on Monday after Prime Minister Theresa May said she was not interested in Britain keeping "bits" of its European Union membership.

It built on those losses on Tuesday, hitting the lowest levels since Oct. 25 at $1.2107. Against the euro, the pound also fell to its weakest in two months, at 87.635 pence .

"There is a risk of the hard Brexit fears becoming the dominant theme that ensures sterling remains depressed for prolonged periods," said FXTM research analyst Lukman Otunuga.

"Although UK economic data continues to display resilience against the Brexit turmoil, the persistent Brexit-induced uncertainty has effectively dented investor attraction towards the pound."

Traders said they would be watching May for any more signals on the likely direction of Brexit negotiations during the weekly Prime Minister's Questions.

Sterling has fallen around 19 percent against the dollar since Britons voted on June 23 to leave the EU, and around 12 percent against the euro, which has itself been vulnerable to political uncertainty. (Editing by Jeremy Gaunt.)

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