Tuesday saw the pound weaken against the dollar ahead of the release of US economic data, with the currency "taking its cue from global markets".

Currency strategist Kamal Sharma told Reuters the pound's performance was a result of an ongoing environment of "nervousness".

Early morning trading yesterday saw the pound trading at $2.0157 and 232.47 yen, dropping 0.1 and 0.5 per cent respectively, according to Reuters.

While the sterling steadied later on in the day, it is anticipated that the dollar could gain against both the pound and the euro ahead of important interest rate decisions this week.

Bloomberg reports that the last month saw the American currency gain 1.3 per cent against the sterling and 1.1 per cent against the euro as investors moved away from corporate debt and asset-back commercial paper.

"The rate story is no longer anti US dollar,'' said Australia-based Peter Pontikis of Suncorp-Metway, according to Bloomberg.

He predicted that a rise in European interest rates will be postponed, "so there's no real reason to buy the euro'.