LONDON, Oct 19 Reuters Sterling fell on Wednesday as traders stayed riskaverse and continued to digest data from Tuesday showing UK inflation unexpectedly held at 6.7 in September, raising the possibility of another rise in interest rates.

At 0851 GMT, sterling was down 0.3 against the dollar to 1.2106, and fell by the same degree against the euro at 87.03 pence.

Sterling has been trading with its typical high beta to global risk conditions in recent days, said Nicholas Rees, FX market analyst at Monex Europe, with concerns around a potential energy price spike resulting from the crisis in the Middle East putting the pound under pressure again this morning.

The market is also waiting with bated breath for remarks from Federal Reserve Chair Jerome Powell at 1600 GMT.

Sterling is falling for a third straight day on dollar strength owing to haven flows, and as U.S. Treasury yields hit a 16year high, the expectation is that the Federal Reserve will keep interest rates higher for longer, said Fiona Cincotta, senior financial markets analyst at City Index.

Domestically, traders are still poring over Monday39;s wage data and Tuesday39;s inflation numbers. The hotterthanexpected consumer price print followed data showing that growth in British workers39; regular pay slowed from a previous record high and job vacancies also declined.

Signs of a softer labour market boosted the chance the Bank of England will leave rates unchanged at its next meeting, while the inflation…