Sterling rose 0.4 per cent to $1.2931 on Tuesday as concerns over a US recession pushed investors away from the dollar, extending the pound's 2.7 per cent gain last week. However, the British currency remained under pressure against the euro, falling for a seventh consecutive session. The euro climbed to 84.445 pence, its highest level since late January, before easing to 84.235 pence, up 0.1 per cent on the day. Analysts expect short-term pound strength against the dollar but caution that it may not last. Markets are watching Britain's GDP data due Friday, though broader currency moves are likely to dominate. Optimism over a potential German defence spending deal and reforms to the country's debt brake have boosted the euro, driving a repricing of German government bonds. The spread between German and UK 10-year yields narrowed by 5 basis points, while the two-year spread tightened by 2 bps, reaching their slimmest levels since late 2024. Attribution: Reuters Subediting: Y.Yasser
