* Pound down 0.3 pct vs dollar after Friday's 5-wk high
* Market awaits further headlines on ECB rescue plan
* Investors eye Bank of England meeting on Thursday
By Michael Szabo
LONDON, July 30 Sterling eased against the
dollar on Monday, in line with a broadly weaker euro, as
investors awaited details on European Central Bank measures to
rescue the faltering euro zone and looked forward to Thursday's
Bank of England meeting.
The pound slipped by 0.3 percent against the dollar
to $1.5699, retreating from a five-week high of $1.5768 hit on
Friday, which marked the end of a two-day, 1.6 percent rise.
"Sterling has been looking resilient over the past couple
weeks. We saw big moves on Friday but we're seeing a general
softening in the risk tone today," Jennifer Hau, FX Strategist
at Lloyds TSB.
"The market will look for further headlines to continue the
momentum we've seen, but unless we get a continuation of the
comments from the end of last week, euro/dollar will probably
dip lower and cable will probably follow."
Against the euro, sterling was flat at 78.22
pence, as Europe's single currency faltered ahead of a European
Central Bank meeting on Thursday.
Last Thursday, ECB President Mario Draghi pledged to do
whatever it takes to save the euro, while late on Friday
Standard & Poor's affirmed the UK's AAA rating with a stable
outlook, quelling worries after lower-than-expected second
quarter GDP data.
Analysts polled last week said Britain had about a one in
three chance of losing its AAA sovereign credit rating.
The market has been focused mainly on events in the euro
zone and the United States, where investors are looking for
signs from policymakers of further quantitative easing.
This has led to resilience in the pound despite weak UK
economic data, but analysts said sterling could be vulnerable if
the Bank of England signals moves towards further quantitative
easing or even a 25 basis point rate cut.
The BoE's Monetary Policy Committee meets on Thursday,
though strategists expect the bank to leave its quantitative
easing target and interest rates unchanged. The Bank's data on
consumer credit is due later on Monday, as are UK mortgage
lending and money supply figures.