August 21, 2017 / 8:47 AM / a year ago

Sterling struggles after worst week since early June

* Graphic: sterling and gilt yields

* Graphic: World FX rates in 2017

* Graphic: Trade-weighted sterling since Brexit vote

By Patrick Graham and Saikat Chatterjee

LONDON, Aug 21 (Reuters) - Sterling edged back on Monday towards an almost 6-week low against the dollar as growing doubts around the progress of Brexit talks with Europe continued to weigh on the currency.

Britain is due to release more information this week to outline its strategy positions in the divorce talks, with ministers striving to head off suggestions that negotiations are going slowly and may be delayed later this year.

Doubts over the government’s handling of the Brexit talks and a collapse this month in expectations for a rise in Bank of England interest rates over the next year have pushed the pound back below $1.30 and 90 pence per euro.

“We are now back in the days of more political uncertainty which does leave more questions on the economic outlook so perhaps leading towards more uncertainty for the pound in the coming days,” said Alexandra Russell-Oliver, a strategist at Caxton FX in London.

Sterling inched down 0.1 percent to $1.2870 in early trade in London. It was 0.1 percent stronger at 91.21 pence per euro.

In July, the EU’s top Brexit negotiator, Michel Barnier, said talks on future relations had become less likely to start in October because of a lack of progress on issues such as how much Britain should pay to leave the EU, the future rights of British and EU citizens, and how to manage a land border in Ireland.

EU officials said progress had been difficult because Britain had no position at all on many issues and that an already-tight timetable could be delayed ahead of the scheduled March 2019 exit.

The release of a swathe of papers this week underlines Britain’s desire to counter that criticism.

One will be a technical paper dealing with services associated with the production, sale and distribution of goods, along with their operation and repair, which Britain’s Brexit department said should form part of the exit negotiations.

“The evidence of the past two weeks reinforces the view that political factors (particularly those that may, even very indirectly, impact the outlook for growth) are now a focus for investors,” said Simon Derrick, chief markets strategist with Bank of New York Mellon in London.

“This is useful to know, particularly given how fragile markets have often proved in Autumn.” (Reporting by Patrick Graham and Saikat Chatterjee; Editing by Raissa Kasolowsky)

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