Sterling rose against a weakening dollar after the Federal Reserve cut interest rates by 50 basis points, with investors awaiting the outcome of the Bank of England policy meeting on Thursday expected to keep borrowing costs on hold.

The pound was at to its highest level in two-and-a-half years after the Bank of England left its key interest rate unchanged, taking a more cautious approach than the Federal Reserve. The pound climbed 0.

The U.K. pound is up 0.7% to $1.3307, its highest level against the U.S. dollar since March 2022, as traders react to news that the Bank of England left its main bank rate unchanged at 5%.