Sterling tested the previous session's one-year high against the struggling euro on Wednesday and hit its lowest level in a month versus the dollar with global currency moves dominating sentiment. There was some caution ahead of Thursday's interest rate decision by the Bank of England's Monetary Policy Committee, which is expected to hold rates now before raising them in coming months. "Sterling is lower on the dollar, in tune with everything else. We have the Bank of England tomorrow and this may cause people to be a bit more nervous about shorting sterling," said Tim Fox, market strategist at National Australia Bank in London. "But it is generally caught in the same wash as everything else as people do not want to be short dollar on the near term basis. The BoE is still not expected to tighten tomorrow but in May." At 0810 GMT sterling was unchanged on the day against the euro at 66.45 pence , after touching Tuesday's one-year high of 66.29 pence earlier in the session. It was also a quarter of a percent down versus the dollar at $1.8360 after earlier falling to $1.8292, its lowest level since early February.
Sterling is now eight cents below its 11-year high versus the dollar set at $1.9140 in the middle of February. Meanwhile, the dollar continued its broad rebound, rising to around $1.2150 per euro, compared with February's record lows of $1.2927. The UK services sector purchasing managers' index is due at 0930 GMT. It is expected to have edged up to 60.0 in February from January's 59.8. Data from Halifax bank showed Britain's house prices rising 1.6 percent last month to stand 17.8 percent higher in the latest three months compared to a year ago.//