Dollar drives on
A growing gap between US and British sentiment regarding the interest rate is yielding diverging patterns for the two currencies.
After keeping the interest rate on hold again last Thursday, the Bank of England looks set to hover around its current level of 4.5 per cent, while the US is promising aggressive, incremental rate rises on the other side of the Atlantic.
Today the dollar stood at 1.7449 to the pound and 1.1740 to the euro.
Credit Suisse strategist Marcus Hettinger told Bloomberg that the US interest rate would soon be on a par with the British, with the American lending rate of four per cent certain to continue rising at a quicker rate than its British counterpart.
"By January, interest rates should be even at the central bank level between the US and UK," he said.
The UK market will watch with interest this week as a series of companies issue updates on their trading performance.
A number of large firms are reporting, including J Sainsbury, with Vodafone, Virgin Mobile and O2 all issuing updates in the telecoms sector.