Sterling climbs as Carney avoids hinting at further easing

The pound rose 0.4 percent to $1.5720 as investors who had bet on hints of more aggressive easing measures from Carney, who takes the helm in July, covered their short positions.

Traders cited buying by an Asian central bank, before sterling ran into offers around the $1.5775-90.

The euro hit a session low against sterling of 85.98 pence. It pared losses to last trade close to flat on the day at 86.34 pence, with eyes in mainland Europe firmly fixed on a potentially pivotal European Central Bank policy meeting.

"The real doves have been disappointed because if they are going to stick with inflation targeting that implicitly means the bank is not going to be as dovish as if they changed to nominal GDP targeting," said Jane Foley, senior currency strategist at Rabobank.

"But the original observation that Carney is a dove will probably be borne out and sterling should revert to being on the defensive."

Strategists said overall the new governor, speaking to a parliamentary committee, appeared to be in favour of continuing with the BOE's existing mandate of targeting inflation rather than growth.

"Very little to shock and indeed it doesn't suggest that he's going to come in with a radically different agenda to governor (Mervyn) King," said Tom Vosa, head of market economics at National Australia Bank.

The next focus for sterling investors is a BoE rate decision at 1200 GMT. Policymakers are expected to keep rates on hold at 0.5 percent and the total of quantitative easing via asset purchases at 375 billion pounds.

Earlier in the session sterling gained some support from data showing UK industrial output rose more than expected, although concerns persisted that the economy could be sliding back into recession.

Concerns about UK growth have weighed on sterling since data showed the economy shrank in the last quarter of 2012.