* 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
LONDON, April 25 Sterling dipped against the
euro on Tuesday, kept under pressure by the single currency's
renewed strength as relieved investors turned optimistic on
Europe after the first round of the French presidential
On Monday the pound had its worst day versus the euro since
early January, falling 1.4 percent after a run-off vote between
two strongly anti-EU candidates was averted in the election.
Expectations that centrist Emmanuel Macron will easily beat
far-rightist Marine Le Pen in the second round on May 7 have
fuelled a relief rally in the EU's shared currency.
That sustained rebound in the euro kept up pressure on
Tuesday on sterling, which was down 0.1 percent at 85.01 pence
"We've seen the euro maintain much of its strength both
against the dollar and the pound following the relief rally and
so we've seen sterling/euro hover around the same levels we saw
yesterday," said Alexandra Russell-Oliver, currency analyst at
Sterling had rallied almost 2 percent last week to hit
four-month highs versus the euro after British Prime Minister
Theresa May called a snap election. Investors expect her
Conservatives to win by a landslide, giving her a clear domestic
mandate as Britain heads into exit negotiations with the
"The pound's euphoric rally on last week's snap election
news could be at further risk if the market loses confidence in
the election's ability to make for easier negotiations with the
EU. The probability of Macron as the next President in France is
also not doing any favors for the pound, with the candidate a
well known critic of the UK leaving the EU," LMAX analysts said
in a note.
Against the dollar, sterling was up 0.1 percent at $1.2802.
This week, investors will look for UK economic output data
out on Friday, while eyes will also be on an EU summit on
Saturday at which draft negotiating guidelines for Brexit will
EU leaders will warn Britain it cannot assume its big
financial services industry will be included in any free trade
deal after Brexit, diplomats said on Monday after fixing
negotiating terms in a draft document.
Amid concerns for the health of the British economy and the
tone of Brexit negotiations, investors have also been wary of
calls for a vote on Scottish independence, which could threaten
a breakup of the UK.
Scots voted by a wide margin to stick with the European
Union in last June's referendum, clashing with the UK as a whole
which voted to leave. Scotland's devolved government, run by the
Scottish National Party (SNP), says this means the country
should be given a new chance to decide whether it wants to split
from the UK. The central government in London opposes this.
Most Scottish voters do not want another referendum on
independence from the United Kingdom and support for secession
itself appears to have weakened, according to a Kantar survey.
(Reporting by Ritvik Carvalho; Editing by Mark Trevelyan)