Sterling edges down before BoE's Bailey speech

The British pound was down slightly against the dollar and the ‌euro on Thursday ahead of a speech from Bank of England Governor Andrew Bailey that could shape expectations for the central bank's next policy move.

Sterling was last down 0.2% against the dollar at $1.3185, just ‌above a three-month low of $1.3181 reached last week. The pound was down about 0.1% against the ‌euro, snapping a nine-day streak of gains. It was last at 84.79 pence per euro .

"There are concerns about public debt and rising term premium in the UK gilt market, but so far the pound has been resilient," said Tommy von ⁠Brömsen, FX ​strategist at Handelsbanken. "Global focus is ⁠not on the UK much right now. It's more on Europe and more on the US."

The euro has been ⁠under particular strain, falling to a 17-month low against the dollar as fiscal concerns in France pushed bond yields sharply ​higher, dampening expectations for further rate hikes from the European Central Bank. BOE IN FOCUS

Investors are ⁠now awaiting speeches from the BoE's Bailey and policymaker Clare Lombardelli for any hints on whether the central bank could raise ⁠rates ​next month. Bailey and Lombardelli are perceived as centrists on the rate-setting Monetary Policy Committee so their speeches will be closely watched, after both voted to keep rates unchanged at the last meeting.

"Any ⁠suggestion that they are ready to cross the Rubicon and vote for a hike could depress euro-sterling ⁠further today," said Chris ⁠Turner, global head of markets at ING. Money market futures imply a more than 80% chance of a rate hike next month, while two quarter-point hikes ‌are fully ‌priced in by the February meeting.