March 6, 2017 / 5:58 PM / 9 months ago

Sterling slips to seven-week low against euro

* 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 Jemima Kelly

LONDON, March 6 (Reuters) - Sterling slipped to a seven-week low against the euro on Monday, weakened by uncertainty over when the formal mechanism for Britain’s departure from the European Union would be triggered, as well as a run of weak UK data.

The British parliament’s upper house will on Tuesday try to force the government to give lawmakers a greater say over the terms of Brexit, when they vote on the wording of legislation that gives Prime Minister Theresa May the right to trigger Brexit talks.

Tuesday’s vote will also demand that both houses of parliament be asked to approve any decision to leave the bloc without a deal if talks fail.

But regardless of Tuesday’s outcome, May’s Brexit bill will then be passed back to lawmakers in the lower house for approval, because last week it was amended to add a condition on protecting the rights of EU citizens in Britain.

It will then be passed back and forth until both houses agree on the final wording of the bill - a process that has no time limit, but will not begin until March 13.

ING currency strategist Viraj Patel said investors would rather Brexit were triggered sooner, now they had got used to the idea it is inevitable.

“Markets want to see the triggering of Article 50 sooner rather than later, because then they get clarity over uncertainty,” he said. “Markets are now more focused on the end-game.”

MUFG currency economist Lee Hardman, however, said sterling had become less sensitive to political developments. Its movements during the past two weeks - when it lost almost 2 percent against the dollar and over 1 percent versus the euro - had more to do with developments in the United States and Europe, he said.

“At least for now the sensitivity to Brexit news for the pound has diminished ... and a lot of the bad news is in the price,” he said.

Sterling slipped to 86.69 pence per euro, its weakest since Jan. 19, in early trade in Europe.

By 1735 GMT, though, it had recovered to 86.54 pence. It was still down 0.1 percent on the day, but the pound benefited from news that former French prime minister Alain Juppe would not run in France’s presidential elections. Investors saw that as making a victory by the far-right Marine Le Pen slightly more likely than with Juppe in the race, which weakened the euro.

Against the dollar, sterling fell 0.6 percent to $1.2230 , close to a seven-week low, with the greenback boosted by revised expectations for when U.S. interest rates will rise. Investors are now pricing in an 87 percent chance rates will rise in March, Reuters data show. (Editing by Larry King)

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