May 15, 2018 / 8:17 AM / 11 days ago

Sterling dips before crucial earnings data

* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

LONDON, May 15 (Reuters) - Sterling edged down against the dollar on Tuesday as traders cut their positions in the British currency ahead of key data on UK wage growth and the labour market.

The Bank of England held interest rates steady last week and cut its growth projections because of weak economic data, sending sterling to a four-month low against the dollar.

Traders will scrutinise Tuesday’s unemployment and wages data for signs of whether inflation is feeding through to higher wage growth, a likely prerequisite to an interest rate hike.

Market expectations of a rate raise in August are currently below 50 percent compared with nearly 60 percent at the start of last week.

Sterling has outperformed other major currencies this year but weak data caused partly by bad weather has seen BoE Governor Mark Carney express caution over the state of the UK economy.

The pound slipped 0.2 percent at $1.3529 and versus the euro it dropped to 88.12.

Labour market data due at 0830 GMT is expected to show earnings growing at 2.6 percent for March. (Reporting by Tom Finn Editing by Catherine Evans)

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