The pound was lower on Tuesday, hovering around a three-week low, pressured by uncertainty about whether the Bank of England will raise interest rates this week.
The sterling rose to a 20 month high against the euro in late October as inflation risks went up, and sterling rose to a 20 month high against the euro. The central bank will make sure investors are on their toes this week as investors don't be able to see what they will do at its policy meeting on Thursday.
Two of the other nine members of the Monetary Policy Committee have expressed similar concerns after BoE Governor Andrew Bailey talked about the need to contain inflation expectations.
Two MPC members say that there is little to do to fix the root cause of accelerating prices, bottlenecks because of the reopening of the world economy which could fade quickly, as a result of the reopening of the world economy.
The head of G 10 FX strategy at CIBC, Jeremy Stretch, said sterling looks to remain on the defensive while the market wanted business data and a decision from BoE.
Ahead of the UK final services PMI and the BoE decision on Thursday, analysts remain divided between no change and a 15 bp increase, said Stretch. We narrowly favour the former. The sterling fell by 0.4% to $1.3614 at 15.10 GMT GMT, hitting a three-week low.
It fell 1% to its lowest level in three weeks, at 85.07 pence.
A fishing row with France and Northern Ireland have contributed to growth worries as a result of the post-Brexit spat with the European Union over Northern Ireland trading arrangements.
A spokesman for Prime Minister Boris Johnson said that Britain wants to find a consensual solution together with France to resolve the fishing dispute after French President Emmanuel Macron postponed slapping trade sanctions on Britain over the fishing row.
A spokesman for the UK environment ministry said that a British fishing vessel seized in France remained in the port of Le Havre and confirmed that Minister George Eustice had misspoken earlier when he said it had been released.