Sterling hit a 15-year high against the yen on Tuesday for the third trading day in a row, buoyed by carry-trade investors enamoured with the high-yielding pound. Sterling also firmed versus the euro after an unexpected drop in the June German ZEW index drove down the single European currency across the board.
A measure of German investor sentiment, the Mannheim-based ZEW economic research institute index fell 20.3 from May's 24, disappointing expectations for a rise to 29.0. "If you look at the performance of euro/sterling, it's down due to the ZEW index. Sterling remains an attractive choice as a means of diversification away from the eurozone," said Simon Derrick, currency strategist at Bank of New York.
At 1431 GMT sterling traded at $1.9871, up 0.20 percent on the day and continuing a generally bullish trend. The euro was down about 0.30 percent against the British currency at 67.43 pence.
The pound was fetching 245.15 yen, near an earlier 15-year high of 245.5, buoyed by carry-trade investors enamoured with the high-yielding pound. The Bank of England will publish June meeting minutes on Wednesday, and are expected to show that two of its 9-member rate-setting committee voted against the decision to hold rates at 5.5 percent.