Investors wait on UK employment data as Sterling goes down further

Sterling edged lower on Tuesday on the back of a broadly strong dollar as investors waited for key UK employment data. Sterling was down 0.1 percent at $1.2887. The British currency has traded within a tight range of $1.28-$1.30 for most of January, its direction largely driven by political wrangling over Brexit. Against the euro, the pound traded flat at 88.17 pence . Employment numbers for November, due at 0930 GMT, are expected to be broadly unchanged from October with the unemployment rate expected to be flat at 4.1 percent according to a Reuters poll.

Sterling firmed on Monday after British Prime Minister Theresa May promised to be more open with parliament in negotiating the country's future relationship with the European Union. "The overall probability of a market-friendly Brexit outcome is currently helping sterling," said Chris Turner, head of foreign exchange strategy at ING in London.

"Yet with the no-deal option still on the table, the probability-weighted outcome for EUR/GBP is 89 pence based on our estimate," he added. With the clock ticking down to March 29, the date set in law for Brexit, the United Kingdom is in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project it joined in 1973. The pound is trading roughly in the middle of its trading range over the last two years. Last week, May's deal suffered a massive defeat in parliament but she then won a subsequent vote of confidence by a narrow margin with the backing of the small Northern Irish party that props up her minority government.