Sterling's Strength: A Hawkish Bank of England Holds the Line

The pound maintained its strength against the dollar and euro, supported by the Bank of England's cautious stance on interest rates. Sterling benefits from expectations that BoE will cut rates less aggressively compared to the Federal Reserve and European Central Bank. Economic indicators from Europe and the U.S. will influence its future movements.

In a show of strength, the British pound held steady near multi-year highs against the dollar and euro on Monday, bolstered by the Bank of England's relatively hawkish position on interest rates.

Sterling rose 0.16% against the dollar, sticking close to a two-and-a-half year peak achieved last week. Against the euro, the currency was up 0.1%, trading at 83.54 pence.

Market sentiment has been driven by traders' expectations that the Bank of England will avoid aggressive rate cuts, in contrast to the recent moves by the Federal Reserve and the European Central Bank. This cautious optimism lends support to the pound as investors look towards upcoming economic data from the eurozone and the U.S. to guide future decisions.

(With inputs from agencies.)