Sterling weakens against the dollar but firms slightly against the euro ahead of Burnham speech

The pound fell against the dollar on ​Tuesday, caught up in the ​global trend, but strengthened marginally against ‌the ​euro as traders awaited a speech by British Prime Minister Andy Burnham at his governing Labour Party's annual conference. The big ‌picture in currency markets is one of a steadily strengthening dollar, and sterling was not immune. The pound lost 0.2% to $1.3226, close to a three-month low, as elevated US bond ‌yields and oil prices combined to boost the dollar.

But the pound did ‌manage to strengthen against the euro for a third day, with the common currency last down 0.1% at 85.72 pence. Burnham will speak later in the day and offer an "honest conversation" with Britain to spell ⁠out the ​trade-offs in tackling some ⁠of the nation's deepest problems, such as social care and the control of utilities, in his first ⁠conference speech as prime minister.

The speech may not have a dramatic effect on markets, but finance ​minister John Healey on Monday managed to elicit a small positive reaction for ⁠the pound and helped British government bonds, known as gilts, avoid the worst of the global selling. Societe ⁠Generale ​analyst Kenneth Broux said the pound and gilts had outperformed peers on Monday after Healey’s pledge for fiscal responsibility.

"But it will take more convincing for gilts ⁠that the government is serious about stabilising spending. PM Burnham faces a tricky balancing act," Broux ⁠added. Also in the ⁠background for the pound was Bank of England data showing that unsecured lending to British households in August rose at the fastest ‌annual pace ‌since at least 1993.