Sterling built on earlier gains versus the dollar and the euro on Wednesday, after the Bank of England forecast in a quarterly report that inflation would rise above its target, supporting interest rate hike expectations. The British pound already rose earlier in the session after strong UK trade data overshadowed the previous day's concerns over weak manufacturing. "The rising above target in two years time is seeing some sterling buying," said Aziz McMahon, currency strategist at ABN AMRO in London.
"But if you look at the way they (BOE) are talking about the longer term outlook...I suspect this will be temporary buying of sterling." At 0945 GMT sterling traded 0.8 percent higher on the day at $1.7719 , compared with $1.7668 before the BOE released its inflation report. It was also 0.7 percent up against the euro ay 67.03 pence , compared with 67.23 pence.///