FX round-up: Torrid Tuesday for sterling as dollar rises, UK Lords deny second Brexit vote

Sterling had a torrid time on key crosses Tuesday as the dollar rose with US rate-hike expectations and also as UK's House of Lords voted against a second Brexit referendum further down the track.

At 17:03 GMT, the British unit was down 0.25% to $1.2205, and also fell 0.22% to €1.1538. The dollar-spot index was up 0.08% to $101.720.

"The pound is again finding few friends on the currency markets today, marking fresh one-month lows against the euro and US dollar," said HL Currency Service senior analyst Chris Saint.

"The pound's progress is likely being kept in check amid lingering concerns the UK the economy is losing steam just as Brexit negotiations seem set to commence shortly," he added.

Lords' vote added volatility to existing Brexit jitters, which have already seen the once-proud pound descend to embarrassing lows. Prime Minister Theresa May's Brexit Bill has yet to passed into law, allowing Article 50 to be triggered.

UK's currency faces potentially further volatility on Wednesday, with traders looking for any snippet of Brexit-relevant news in Chancellor Philip Hammond's Spring Budget.

European Central Bank's bid rate and press conference on Thursday will also be scrutinised, along with a pack of transatlantic data due out toward's week's end.

Craig Erlam, senior market analyst at Oanda, said sterling's tough Tuesday was exacerbated by some weaker economic data.

"It was inevitable that Brexit would start to take its toll eventually on the economy and some cracks are starting to appear, with the consumer being discouraged by higher prices," he said.

Erlam was referring to a slowing in retail prices, as monitored by British Retail Consortium, and a tapering of growth in UK house prices, as recorded by the Halifax.

"The pound is currently testing $1.22 support against the US dollar with the next major level for the pair coming around $1.20, where it found support earlier this year," he added.

Sterling was also down versus the loonie, kiwi, rand and yen, and also the aussie. The latter outperformed after Reserve Bank of Australia expectedly stayed put on interest rates last night.

Turning to the US, the greenback rose against the euro, which was suffering on political and economic issues. It also rose on the kiwi and yen, but tapered on the aussie, loonie and rand.

Expectations are that the Fed will hike rates in March, this view divined by traders reading between the lines of various and increasingly hawkish officials at the US central bank.

Spreadex financial analyst Connor Campbell said both sterling and the euro were "trembling at the site of the juiced-up greenback".

Erlam, meanwhile, opined that opinions were "so high" for a Fed rate hike in March, and at a 50% probability for three lifts this year.

"I wonder how much longer the dollar can sustain these moves," he said, flagging various US jobs data out on Friday.