Sterling hit its lowest levels since March against the euro on Tuesday, but cable rose 0.4%, as global risk appetite improved due to positive European economic data and an easing of U.S.-China tensions, lessening demand for the safe U.S. dollar.

The euro was bolstered by French business activity rebounding more than expected in June, returning to growth after three months of an unprecedented downturn. It also took a boost from data showing the euro zone downturn eased again this month.

The pound fell to its lowest in three months against the euro, at 90.775 pence per euro, before recovering somewhat to 90.440 at 1503 GMT, down around 0.2% on the day.

Against the dollar - which was weakened by an improvement in global risk appetite after the Washington backtracked on comments that the U.S.-China trade pact was over - the pound was up 0.4% at $1.2520.

Source : Reuters