LONDON, Aug 10 (Reuters) - Sterling hit a 3-week low against a recovering U.S. dollar on Thursday, falling a third of a percent ahead of industrial output and trade data watched for more signs of the economic impact of the Brexit process.
The pound has lost more than 13 percent in trade-weighted terms since last year's decision to leave the European Union but Britain's trade deficit with the rest of the world remains huge.
Sluggish output numbers a month ago also weakened sterling further, although a survey by the Confederation of British Industry in late July suggested manufacturing was improving at the fastest rate since the mid-1990s.
"I'll be intrigued by the production figures; the CBI says order books are full thanks to sterling's weakness and it will be interesting to see if there are any signs of a bounce as a result," said Neil Mellor, a currency strategist with Bank of New York Mellon in London.
"The pound is on the way down. It is drifting towards the lows from last month against the dollar. If we get a weak figure you can imagine the market continuing to sell sterling."
By 0755 GMT, sterling was down 0.35 pct on day at $1.2952. It was roughly flat at 90.42 pence per euro (Reporting by Patrick Graham; editing by Nigel Stephenson)