Sterling strives to recover from five-month low

Sterling rose on Tuesday against a basket of major rivals, on track for the first profit in three days versus the dollar amid attempts to recover from five-month lows hit yesterday as traders follow Parliamentary hearings on inflation today. 

GBP/USD rose 0.2% to 1.3452 from the opening of 1.3424, with an intraday high at 1.3462, and a low at 1.3412. 

Sterling closed down 0.4% yesterday, the second loss in a row to a five-month trough at 1.3390, amid persistent concerns about the yawning gap between long-term bond yields in Britain and the US. 

The dollar index shed 0.2% on Tuesday for the second day on profit-taking after hitting five-month highs yesterday at 93.95.

Traders are collecting profits on the dollar after 10-year treasury yields backed off seven-year highs. 

Bank of England governor and several other members will testify on inflation and economic outlook before Parliament today. 

It's worth noting that Bank of England cut its inflation and growth forecasts in 2018 and 2019 in its latest inflation report, which is the subject of this testimony.