Pound Gains Amid Central Banks' Divergent Rate Paths

The British pound continued its upward trajectory against the euro for the fourth consecutive session on Tuesday, buoyed by UK labor market data that analysts believe won't sway the Bank of England's cautious stance on interest rate cuts, given the prevailing high inflation.

The euro fell by 0.24% to 86.24 pence, marking its lowest level since late July. This year, the euro-pound pair has been notably more volatile compared to last year, as the Bank of England and the European Central Bank differ in their rate-cutting speeds.

The pound also rose against the dollar, with a gain of 0.28% to $1.3469. However, U.S. inflation data due at 1230 GMT could influence future Federal Reserve policy expectations. Despite weakened UK job market data in July, strong wage growth reinforces the Bank of England's cautious approach, with markets predicting only a 50% chance of another rate cut this year.

(With inputs from agencies.)