Pound Hits 26-Year High Against Dollar

LONDON – The British pound hit a 26-year high against the U.S. dollar Tuesday, shooting above $2.04, after higher-than-expected inflation figures raised expectations of another hike in United Kingdom base rates. The dollar was up against other key currencies.

Gold prices were mixed in European trading.

The euro traded at $1.3783, down from $1.3784 late Monday. Later, in midday trading in New York, the euro fetched $1.3781.

Other dollar rates in Europe, compared with late Monday, included 122.34 Japanese yen, up from 121.82; 1.2031 Swiss francs, up from 1.2021; and 1.0436 Canadian dollars, up from 1.0429.

The British pound traded at $2.0455, up from $2.0371.

In midday New York trading, the dollar bought 122.36 yen and 1.2031 Swiss francs, while the pound was worth $2.0453.

Sterling rose after the Office for National Statistics reported that consumer prices rose 2.4 percent in the year ending in June, a tenth of a point higher than most economists expected. Base interest rates in the U.K. are now at 5.75 percent, but many analysts expect a further rise to combat inflation.

Gold traded in London at $665.50 per troy ounce, down from $665.60 late Monday. In Zurich, gold traded at $663.95 per troy ounce, up from $663.05. Gold fell $2.50 in Hong Kong to $664.95.

Silver traded in London at $13.00 per troy ounce, up from $12.95.