The pound sterling climbed alongside the euro against the dollar on Tuesday as investors assessed the likelihood of a peace agreement between Russia and Ukraine after positive diplomatic signals from a White House meeting with European leaders. The pound rose 0.1 per cent to $1.3515 while holding flat at 86.34 pence per euro in muted foreign exchange trading. Analysts said markets remained cautious despite signs of progress, with ING strategist Francesco Pesole noting that the most difficult negotiations, particularly over territorial issues, still lay ahead. Attention is now turning to UK inflation data due on Wednesday. ING expects headline inflation to accelerate to 3.7 per cent in July, with services inflation rising to 4.8 per cent. A stronger reading could slow the pace of Bank of England rate cuts, although recent labour market weakness clouds the outlook. The dollar held steady against a basket of major currencies as investors awaited guidance from the US Federal Reserve's Jackson Hole symposium later this week. Attribution: Reuters Subediting: M. S. Salama
