Sterling hit a one-month high against a weakening dollar and was flat versus the yen on Tuesday.

Investors are awaiting business activity figures on Thursday and comments from Bank of England governor Andrew Bailey at a meeting of central bankers at Jackson Hole on Friday.

Official data showed signs of improvement for the British economy in the retail sector on Friday as the negative impact of high inflation on consumer spending is starting to diminish.

The pound climbed 0.15% against the dollar to $1.3002 after hitting $1.3012, its highest level since July 17.

The greenback hit a seven-month low on Tuesday, with traders waiting for clues on Friday at Jackson Hole about the speed of the Fed monetary easing cycle.

Money markets priced in 40 basis points of rate cuts by year-end, implying a 25 bps move and a 60% chance of a second cut.

Euro/sterling rose 0.2% to 85.18 pence per euro.

Source : Reuters