Pound hits three-month high against the dollar
The pound hit a three-month high against the dollar in early trading today, ahead of a number of key company announcements.
A short time ago £1 was worth $1.7835. Analysts said the relative weakness of the dollar was in part due to the belief that the Federal Reserve was planning to put an end to its recent interest rate rises.
The Fed has been seeking to take the heat out of the US economy in recent months following sharp rises in the price of oil and other inflationary pressures.
Analysts expect an end to the rate rises in the US but a series of base rate increases by the European Central Bank (ECB) are set to make for a stronger euro.
"If you look at speeches by ECB central bankers, they want to hike rates,'' Benedikt Germanier, currency strategist at UBS AG, told the Bloomberg news agency.
"That supports a stronger euro, as we expect the Fed to hike only once, maybe twice, more.''
In the UK, analysts will be watching closely as a number of top financial institutions announce their results.
Prudential, Northern Rock and Legal & General will all provide updates on their performance this week.