Announcement by Reuters...
LONDON, Jan 7 (Reuters) - Sterling extended gains against the euro on Wednesday, pushing the single currency below the key 90 pence level for the first time in three weeks ahead of an interest rate announcement by the Bank of England later in the week.
The single currency fell roughly half a percent to 89.97 pence according to the Reuters Dealing system, its weakest level since mid-December.
Gains against the euro pushed the pound up 1.5 percent to $1.5164, its strongest in three weeks.
The BoE is widely expected to cut interest rates by 50 basis points from 2.0 percent.
"There's an unwinding of speculative short pound positions, given the fact that euro/sterling didn't reach parity," said Lee Hardman, currency strategist at BTM UFJ in London.
"Maybe we're starting to see aggressive monetary easing expectations pared back as well, and that may be helping the pound."