Pound approaches 3-week high before sales report

Edinburgh - The pound rose for a second day versus the dollar, approaching the highest level in three weeks, before UK retail-sales data Thursday that will give investors another opportunity to gauge the timing of the Bank of England’s first interest-rate increase since 2007.

With currency markets fixated on the Federal Reserve’s policy meeting ending on Thursday, sterling advanced a day earlier after data showed UK wage-growth expanding at a faster pace than economists predicted.

Sales excluding auto fuel rose 0.1% in August, after climbing 0.4% a month earlier, the Office for National Statistics will say, according to the median estimate of analysts in a Bloomberg survey.

The pound rose 0.2% to $1.5519 as of 10:17, after touching $1.5529 on Wednesday, the highest since August 26. The UK currency gained 1% versus its US peer on Wednesday, the biggest gain in three months. Sterling weakened 0.2% to 73.01 pence per euro, after strengthening 0.8% a day earlier.

The UK currency has benefited in the past week as the dollar’s rally lost momentum, with traders reducing wagers on the Fed raising rates at its policy meeting ending later on Thursday to 32%, from 48% a month ago.

The dollar fell 0.7% in the past week, the second biggest drop in a basket of 10 major counterparts.

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