LONDON (Reuters) -Sterling dropped a touch on Tuesday after data showed growth in average British earnings slowed slightly in the three months to August, suggesting the Bank of England may be able to continue cutting interest rates, albeit very gradually.

The pound was last down 0.2% on the dollar at $1.3309, having traded in modestly positive territory before the data was released.

It also softened on the euro, which was up 0.3% at 87.03 pence, on track for its biggest daily jump in nearly a month.

(Reporting by Alun John; Editing by Amanda Cooper)

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