Sterling at 3-month high vs dlr, eyes 26-year peak
LONDON, Oct. 29 (Reuters) - Sterling hit a three-month high against the beleaguered dollar on Monday, with deteriorating sentiment toward the U.S. currency and economy the dominant theme across global foreign exchanges.
The dollar fell to record lows against the euro and a basket of six major currencies as traders prepared for an anticipated Federal Reserve interest rate cut later this week and fretted that record oil prices approaching $100 a barrel could further weaken U.S. economic growth.
With no major UK economic data releases or policymakers' speeches scheduled for Monday, the pound took its direction from the dollar.
"It's a dollar weakness story at the minute rather than a sterling strength story," said Paul Robinson, currency strategist at Barclays Capital in London.
"It's a very important week for the U.S. ... (and) sentiment remains very weak on the dollar and the economy in general."
At 0850 GMT, sterling was up a quarter of a percent against the dollar at $2.0582, its highest in three months.
That took "cable" within a cent of the 26-year high of $2.0655 struck on July 24.
The euro was 0.1 percent weaker against the pound at 70.05 pence.
The three key U.S. events this week are likely to be the Fed's rate decision on Wednesday, the first estimate of gross third quarter domestic product growth the same day, and release of October's non-farm payrolls report on Friday.
Traders and analysts expect the Fed to cut rates a quarter point to 4.5 percent, third quarter GDP to come in at a relatively robust 3 percent, and payrolls to show a net 80,000 increase in job creation.
There are no heavyweight UK economic indicators due this week, although house price data on Wednesday could give some steer on the Bank of England's rate path and consumer spending in the coming months.
The Nationwide building society's October house price index is expected to show the rate of increase slowing to 0.3 percent on the month and 8.6 percent on the year.
Source supplied by: Reuters