LONDON, Dec 16 - Sterling steadied just below last week's 11-year high against the dollar but lost ground to the euro on Tuesday as dealers awaited a raft of data this week for guidance on Britain's interest rate outlook. Inflation data due later in the session will be followed by jobs data on Wednesday and retail sales data on Thursday. Minutes of the Bank of England's December policy meeting, which kept rates unchanged at 3.75 percent, will also be released on Wednesday. Sterling stood at $1.7460 at 0845 GMT, a fraction firmer on the day and half a cent away from peaks scaled last Friday. But it was mired near a two-month low at 70.76 pence per euro as the single currency scaled fresh record highs above $1.2350 .
"Sterling is still being caught up with euro/dollar moves" said Jane Foley, currency strategist at Barclays Capital. "The fact the weekend news from Iraq had such a limited impact on the dollar has boosted euro sentiment." UK inflation, under the harmonised index of consumer prices measure which Britain adopted last week, is forecast to rise 1.5 percent in November from 1.4 in October. Although inflation remains below the Bank of England's new target of 2.0 percent, most analysts think interest rates will head higher in the first few months on 2004 as the BoE tries to cool rising house prices and consumer debt levels.//