Sterling rises to four-week high

Sterling jumped past $1.45 on Thursday and was on track for its best daily gain in a year, after the Bank of England kept interest rates unchanged as expected and said rates were more likely to rise than not over the next three years.
The monetary policy committee voted unanimously to keep rates steady, dashing speculation on the margins in markets that one or more of the nine-member committee could veer towards a rate cut.
Sterling started the European day on a strong note, bouncing back from a two-week low against a weakened dollar, after a Federal Reserve meeting left investors convinced that US interest rates would not rise anytime soon and drove many to unwind favourable bets on the greenback.
Sterling rose 1.7 percent to $1.4503, its highest since February 16, and adding over 3 percent from a two-week low of $1.4053 struck on Wednesday, when the government's 2016 budget trimmed growth and inflation forecasts.
The euro was also lower, falling 0.7 percent to 78.19 pence, from 78.865 pence before the BoE announcement.
"The minutes didn't offer much by way of new insight into the committee's thinking versus the February Inflation Report," said Sam Hill, economist at RBC Capital.
"Concern about risks to the downside from global growth were reiterated, but set against that it was noted that there should be some support for economic activity from a lower market-implied path for rates...."
And while the BoE was perceived to be neutral as far its rate outlook goes, investors were busy trimming long dollar bets after the dovish Fed statement on Wednesday.
The Fed cut its rate hike path to just two hikes from four, citing subdued global growth, along with elevated levels of volatility in the financial markets.
That was enough to dispel expectations that rates would rise in either April or June. The dollar index fell to its lowest since October 22 to trade at 94.658. Despite the bounce in the pound, most traders said it would struggle to gain much before Britain's referendum on whether to remain in the European Union on June 23.
Investors worry that a so-called Brexit would depress growth, push back British rate hike expectations and threaten the huge foreign investment flows Britain needs to fund its current account deficit, one of the biggest in the developed world at about 4 percent of output.