Sterling snaps three-day winning streak vs dollar, holds firm vs euro

LONDON, June 30 (Reuters) - The pound strengthened against the euro and dipped against the dollar on Tuesday as traders positioned for a likely Andy Burnham premiership in Britain and digested data from the euro zone and U.S.

Moves were muted, but sterling snapped a three-day run of gains against the dollar and was last down 0.2% at $1.3233.

Against the euro, sterling was firmer, with the single currency down a fraction at 86.10 pence, moving back towards last week's low of 86.03, its weakest since August 2025.

Data on Tuesday confirmed Britain's economy grew 0.6% in the first quarter, unchanged from the initial estimate and doing little to shift markets.

Investors were instead still digesting Burnham's speech on Monday, in which Britain's prime minister-in-waiting pledged radical political change by devolving more power to regions and promoting cooperation over division as part of a 10-year mission to drive what he called "good" growth.

Markets were initially wary of a Burnham premiership amid expectations he could pursue higher borrowing and spending.

While reaction to his latest remarks has been muted, it has been marginally positive for sterling.

"Sterling's supported by the fact that Andy Burnham was talking about devolution yesterday, that's not a dangerous topic for him to talk about (for markets)," said Kit Juckes, chief FX strategist at Societe Generale.

"The kind of devolution he wants might be expensive so we'll have to see where that goes, but he's done nothing to hurt and so some more sterling bears have been squeezed out."

Sterling also drew support against the euro from softer inflation readings from France and several German states, which could reduce the likelihood of the European Central Bank delivering a second rate hike this year.

Markets may get more direction on Wednesday when ECB President Christine Lagarde appears on a panel alongside Bank of England Governor Andrew Bailey, and new Federal Reserve chief Kevin Warsh.

(Reporting by Alun John. Editing by Mark Potter)