June 12, 2012 / 8:27 AM / 8 years ago

Sterling holds steady vs dollar, UK data may weigh

 * Pound holds steady vs dollar
 * Vulnerable to worries about UK QE, euro zone debt
 * UK industrial output data due at 0830 GMT
 By Jessica Mortimer	
 LONDON, June 12 (Reuters) - Sterling held steady against the
dollar on Tuesday but it remained vulnerable to euro zone debt
concerns while weak UK data could also put it under pressure.	
 UK industrial production and manufacturing data was due at
0830 GMT. A weaker-than-forecast reading would increase
speculation that the Bank of England may opt for another bout of
quantitative easing and would weigh on the pound. 	
 But analysts said sterling was likely to remain mostly
driven by events elsewhere, with concerns about Spain's debt
problems and caution ahead of elections in Greece at the weekend
likely to support the dollar and pressure riskier currencies.	
 The pound was expected to stay supported against the euro,
however, as market players seek alternatives to the common
currency.	
 Sterling was steady against the dollar at $1.5468,
staying below a one-week high of $1.5601 struck on Thursday. 	
 Traders cited talk of bids around $1.5460, where the pound
also had support from a trendline drawn from the June 1 low of
$1.5269.	
 "Clearly investors are nervy of more QE in the UK, which
hangs in the balance, but the industrial production data may
have to be significantly weaker to elicit a decent response in
sterling," said Simon Smith, economist at FXPro.	
  He added that nervousness before the Greek election would
probably push sterling lower against the dollar and keep it well
supported against the euro, which he said was likely to move
back down towards the 80 pence mark. 	
  UK industrial output was forecast to rise by 0.1 percent
month-on-month in April, while manufacturing output was expected
to be flat.   	
 The euro was steady at 80.58 pence,
well below a high of 81.63 pence hit on Monday, its strongest
level since early May, when the euro gained a short-lived boost
in response to a bailout deal for Spain's banks over the
weekend.	
 But the initial optimism quickly faded as concerns remained
about Spain's long-term access to markets. 	
 Investors were also turning their attention to Greek
elections, where a victory for far-left anti-bailout parties
could push Greece towards a chaotic exit from the euro zone.	
	
 
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