Sterling Rises to 11-Month High Versus Weak Dollar

0837 GMT – ING says sterling’s rise is largely due to dollar weakness. “It seems that the view that European banks, including the U.K., are better regulated than those in the U.S. is providing some insulation to European currencies,” says ING currency analyst Chris Turner. This is helping keep alive expectations that the Bank of England could raise rates two or three further times this year, a view which ING doesn’t share, he says. GBP/USD is last up 0.1% at 1.2567. EUR/GBP falls 0.2% to 0.8794. ([email protected])

Dollar Expected to Weaken Further as US Rate Cuts Loom

0714 GMT – The dollar falls and many analysts expect it to drop further after the U.S. Federal Reserve raised interest rates but omitted to mention that additional policy firming may be necessary. “Market participants are increasingly pricing in rate cuts through the rest of this year as U.S. recession risks continue to build,” Lee Hardman, senior currency analyst at MUFG says in a note. “We remain confident the U.S. dollar will weaken further.” Rate cuts look even more likely due to renewed signs of U.S. banking-sector distress after shares in PacWest Bancorp tumbled more than 50% in after-hours trading, Hardman says. The DXY dollar index falls 0.2% to 101.157, having hit an eight-day low of 101.0270. ([email protected])