By James Amott
The British pound, which has risen 1.7 percent against the dollar in the past three weeks, was little changed as investors look for signs of the extent to which U.K. economic growth has slowed.
The Bank of England unexpectedly cut its benchmark interest rate by 50 basis points last week, stoking speculation Europe's No. 2 economy is cooling more quickly than many analysts had predicted. Concern about slowing growth may lead investors to shun U.K. financial assets and the pounds needed to buy them.
The Bank of England's ``increased emphasis on weakness in the U.K. domestic situation has put sterling under pressure,'' said Ian Stannard, a currency strategist at BNP Paribas. The pound may fall as low as $1.4410 in coming days, he said.
Sterling was at $1.4572, compared with $1.4570 late Friday. Against the euro, it was little changed at 61.36 pence, from 61.30. The pound has fallen 2.4 percent against the dollar and risen 3 percent against the euro this year.
Many analysts and investors have said the British economy will outpace those of the U.S. and 12 countries that share the euro, which has boosted the pound. The U.K. is the best-performing economy in the Group of Seven industrialized nations, according to Ryan Shea, an economist at Bank One.
Britain's economy expanded 0.6 percent in the third-quarter, while the U.S. contracted 0.4 percent, the first drop since 1993. The Federal Reserve and European Central Bank also reduced their benchmark interest rates by a half-percentage point last week.
Sterling may gain support from the U.K.'s having higher short- term deposit rates than the U.S. and euro nations. Three-month U.K. deposits pay 3.87 percent, compared with 1.95 percent in the U.S. and 3.3 percent in the euro region.
A report on U.K. producer prices is due at 9:30 a.m. London time. Prices probably fell 0.1 percent in October, and 0.6 percent from a year earlier, according to a Bloomberg News survey. There are no major U.S. reports scheduled for release today.