Sterling rebounds against broadly weak dollar
LONDON, Nov 20 - Sterling bounced back against a broadly weakening dollar on Tuesday, staging a recovery after coming under pressure recently from expectations of an early UK rate cut.
Against the euro, however, sterling was little changed, showing its rise against the dollar was more connected with negative sentiment towards the U.S. currency than positive sentiment towards the UK currency.
"There is general weakness in the dollar, which has come across against a range of currencies ... The market is more willing to believe a bearish story for the dollar than a bullish story," said Steve Barrow, currency strategist at Bear Stearns.
At 0850 GMT, the pound was up 0.6 percent against the dollar at $2.0615. The euro was steady at 71.51 pence, within sight of the 71.71 pence, 4-1/2 year high set last week.
"The sell-off (in sterling) in the last week or so was fairly aggressive ... I think we could be up at $2.11 again before the end of the year," Barrow added.
"There are negative issues. In some people's view sterling is high. Another issue is that base rates could be cut fairly soon. But we tend to feel the positives outweigh the negatives."
Meanwhile, the dollar fell to fresh record lows of $1.4766 against the euro, according to Reuters data, weighed by speculation on trading floors of an inter-meeting U.S. interest rate cut.
The dollar also fell below 1.1100 Swiss francs to 1.1096 francs, according to Reuters data.
At 0930 GMT data on British public finances for October is released, as well as information on provisional broad M4 money supply growth.
At 1100 GMT comes the CBI's November industrial trends survey. Analysts expect the manufacturing order books balance to have slipped to -9 from -6 in October.
But the market is more likely to watch the Fed's publication of minutes from its last rate-setting meeting later on Tuesday, as well as waiting for BoE minutes due on Wednesday.
Source supplied by: Reuters