Sterling Slips Amidst Yen-Driven Dollar Uncertainty

The sterling pound traded lower on Tuesday as the euro also edged down, amidst uncertainty over dollar sentiment fueled by Japan's yen rally.

According to Francesco Pesole, FX strategist at ING, 'This still looks primarily like a JPY story rather than evidence of a broader shift in sentiment towards the dollar.'

The yen-fueled selloff pushed USD/JPY through the key 155.0 level and extended to 153.0 overnight, with thin liquidity around the U.S. Labor Day holiday contributing to the move.

Pesole cautioned that the move looked overdone on short-term fundamentals, with the next meaningful USD/JPY support at 152 and a break there opening the way towards 150.