Sterling resumes gains near 10-month highs

Sterling rose in European trade against a basket of major rivals, resuming gains against the greenback and almost hitting ten-month highs as markets expect multiple more Bank of England's rate hikes.

The greenback fell for another session following weak US labor data, triggering concerns about the health of the US economy. 

GBP/USD rose 0.4% to 1.2522, with a session-low at 1.2465, after closing down 0.2% yesterday, the second losses in a row on profit-taking off ten-month high at 1.2584.

UK Economy

In the latest positive UK data, housing prices rose in April for the first time in August as mortgage demand rebounds.

UK Rates Expectations

Now markets have fully priced in a 0.25% rate hike by Bank of England in May to 4.50%.

And following such strong recent data, markets expect two more rate hikes to a final 5% rate.

Such successive rate hikes will close the gap with the Federal Reserve and will make UK rates ahead of European counterparts.

The Dollar

The dollar index fell 0.3% on Wednesday for another session off three-week highs at 102.40 against a basket of major rivals. 

Dollar dropped after US data showed job opportunities tumbled for the third month in a row during March.

Later today, the Federal Reserve will announce its policy decisions, with an 88% likelihood for a 0.25% rate hike to 5.25%.