(Updates prices, adds quotes)
LONDON Dec 12 Sterling rose against a broadly
weaker dollar on Monday, recovering ground lost last week as
investors braced for a busy week with the latest top-tier UK
economic data releases and Bank of England policy meeting.
Britain's benchmark 10-year government bond yield topped
1.50 percent on Monday for the first time since May,
increasing sterling's appeal.
At the same time, the dollar retreated on concerns the U.S.
Federal Reserve, widely expected to raise interest rates on
Wednesday, may also express concern that the greenback's gains
have gone too far.
In late European trade, sterling was up 0.7 percent at
$1.2661 and the euro was down 0.4 percent at 83.65
Sterling chalked up its first weekly fall against the dollar
in four last week, falling 1.1 percent as British lawmakers said
they would stick to Prime Minister Theresa May's timetable for
Britain leaving the European Union, dampening investors' hopes
for a delayed Brexit.
This week's UK economic calendar opens on Tuesday with
November's inflation figures, which are expected to show a
slight rise to 1.1 percent. Prices are expected to spike much
higher next year as sterling's weakness feeds through.
The pound is trading about 15 percent lower against the
dollar after Britain voted in June to leave the EU, and about 10
percent weaker against the euro.
Unemployment and average earnings numbers follow on
Wednesday before retail sales and the BoE rate decision on
ING currency strategist Viraj Patel said he expected signs
of a slowdown in the real economy to show through in the first
half of next year.
"This week could potentially be the start of that sort of
story," he said.
The BoE is expected to refrain from changing rates or its
quantitative easing bond buying programme this week, but
investors will closely scrutinise comments from governor Mark
Carney on the outlook for the coming months.
"They are probably going to have to start leaning to the
more dovish side so we think the balance of risks is for them to
cut again," said ING's Patel.
(Reporting by Jamie McGeever and Nigel Stephenson; Editing by