FX round-up: Sterling lower on the crosses as UK data weighs

Sterling ended Tuesday lower on most key pairs in a UK market sombre all day after the deadly Manchester suicide bomb attack last night.

The blast, at an Ariana Grande concert in the Manchester Arena, left 22 people dead and 59 injured. Prime Minister Theresa May condemned it as a callous terrorist attack.

"As for the UK, investors' minds were understandably elsewhere," said Connor Campbell, financial analyst at SpreadEx.

At 17:05 BST, sterling was down 0.12% to $1.2985. The dollar-spot index was up 0.24% to $97.214.

Jasper Lawler, senior market analyst at London Capital Group, said sterling had been blocked from crossing the $1.30 level today by a larger than predicted UK budget deficit in April.

"The narrowing of the (UK election) polls, talk of quitting Brexit talks and the Tory social care U-turn have given currency traders pause for thought," said Lawler.

Chris Saint, senior analyst at HL Currency Service, added that sterling reversed away from the $1.30 mark after disappointing Confederation of British Industry survey data.

That data, he said, "shone the spotlight on an increasingly challenging environment for UK retailers this month after a strong April."

Sterling was also down on the aussie, loonie, kiwi and rand, but rose on the yen. It was up 0.21% to €1.1593. The dollar was up 0.34% to €0.8929.

"The single currency is edging lower as the US dollar exerts its dominance," said David Madden, market analyst at CMC Markets UK.

Lukman Otunuga, research analyst at FXTM, said there was a growing possibility of the European Central Bank (ECB) rattling the financial markets in its pending ECB meeting as the recent political relief invites hawks.

"With economic data from Europe following a positive trajectory, the ECB could start considering a stimulus exit at the next meeting which may strengthen the euro further," said Otunuga in a statement.

Meanwhile, the dollar made gains on the yen, but slipped on the aussie, loonie, kiwi and rand.

Madden said overall the greenback's performance might be judged as resilient in the face of mixed economic indicators.

"The flash manufacturing PMI report was well received, but the flash services PMI report slipped slightly on the month," he said.

"The new homes sales report was disappointing, and the Richmond manufacturing index was dreadful, but the US dollar still held up."