Sterling rose against the euro on Thursday, recovering from recent three week lows, helped by rising bond yields after the Bank of England chief showed no immediate concern about their impact on the economy, Reuters reported.
The benchmark 10-year gilt yield continued to rise, hitting a fresh two-year high of 2.827 percent while its gap between German 10-year bund yield widened to a new three year highs. That gave the pound a boost versus the euro.
The euro was down 0.5 percent against the pound at 85.49 pence, having hit a three-week high of 86.51 pence on Wednesday. The pound has so far risen 2.3 percent against the euro this month.
Against the dollar, sterling was flat at $1.5520 outperforming most major currencies like the euro which fell 0.6 percent against the dollar. The dollar was also firmer against the yen and a basket of currencies.
The steady rise in UK money market rates and yields has supported the pound, which is up 2 percent against the dollar.