Sterling rose on Thursday against a basket of major rivals, extending gains for the third straight session as most analysts expect Bank of England to extend the path of policy tightening this year.
Conversely, the dollar extended losses as the latest Fed meeting bolstered the case of ending the current cycle of US policy tightening.
GBP/USD rose 0.3% to 1.2977, with a session-low at 1.2924, after rising 0.3% on Wednesday, the second profit in a row, recovering from a two-week low at 1.2798 as the greenback declined against major rivals.
Even as UK inflation calms down, analysts still expect Bank of England to be aggressive in its fight against high consumer prices.
UK inflation slowed down to 7.9% last month, the slowest in 15 months, but still far from the 2% target.
Markets are still expecting three more interest rate hikes in the UK by the end of the year, raising the final rates to 5.75%, which would surpass the current US interest rates.
This the gap in interest rates would switch to the side of Britain, in turn boosting the pound’s standing.
