LONDON, June 17 (Reuters) - Sterling fell against the dollar and the euro on Tuesday, while UK shares rose after British inflation fell more sharply than expected in May, giving the Bank of England some room to keep interest rates near record lows.
Sterling dropped to a day's low of $1.6938 after the data from around $1.6977 beforehand. The pound had risen past the $1.70 mark for the first time in nearly five years on Monday on growing expectations that the Bank of England will tighten policy before the end of the year.
The euro rose 0.1 percent to 80.08 pence from around 79.86 beforehand.
Britain's FTSE 100 index slightly extended gains after the data to trade 0.3 percent higher at 6,772.14 at 0833 GMT. (Reporting by Anirban Nag and Francesco Canepa; editing by Patrick Graham)