Sharjah24 – Reuters: The British pound rose on Tuesday, moving away from 21-month lows against the dollar as traders took profits on the recent surge in the U.S. currency ahead of both Federal Reserve and Bank of England monetary policy meetings this week.
The Bank of England meeting, which is expected to result in a 0.25-percentage-point rise in interest rates on Thursday, is the big event of the week for sterling.
In recent weeks the pound has fallen sharply as investors have piled into dollars in expectation that the Federal Reserve will raise rates faster than other central banks and that the U.S. economy will hold up better than others in the face of soaring inflation and slowing economic growth.
The U.S. central bank will meet on Tuesday and Wednesday and is expected to raise interest rates by 50 basis points -- the first of a series of aggressive hikes expected by money markets. Rises totalling 270 basis points by February are priced in.
On Tuesday, sterling rose 0.4% to $1.2549 GBP=D3, compared with a 21-month low of $1.2412 hit last week.
ING analyst are expecting a 0.25-percentage-point BoE rate rise this week.
The pound has held up better against the euro in recent weeks, remaining in a relatively tight trading range.
By 0805 GMT on Tuesday the euro was 0.3% lower versus the British currency at 83.87 pence EURGBP=D3.
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