LONDON, Oct 29 - Sterling rose to its highest in over a week against the dollar on Monday as speculation of M&A-related inflows extended positive momentum generated by Friday's unexpectedly strong British economic growth data. News that U.S. finance house Babcock & Brown may bid for British rail network operator Railtrack and a weekend newspaper report that German media giant Bertelsmann was eyeing Britain's Carlton Communications were adding to sterling's appeal, dealers said. The dollar, meanwhile was trading with a weaker tone across the board as nervousness grew ahead of a slew of U.S. data due later this week.
"Sterling is benefiting from renewed concerns about U.S. economic weakness and recent signs of independent UK economic strength," said Steven Saywell, currency strategist at Citibank. "Reports of potentially sterling-supportive M&A deals have also helped." Data last Friday showed Britain's economy grew 0.6 percent in the third quarter, well above expectations. The figures reinforced the view that Britain's economy was set to outperform both that of the euro zone and the United States in the near term.
Sterling had risen more than half a percent to highs around $1.4445 by 0830 GMT, its best showing since October 18 according to data.
It was slightly firmer against the euro at 62.12 pence .
Technical analysts at HSBC Bombay said a daily close above $1.4390 would turn sterling's chart outlook mildly bullish.
British consumer credit and money supply data are due at 0930 GMT.