Ammon News - Sterling hit a fresh 4-1/2-month high at $1.30 against the dollar on Tuesday on rising expectations the Bank of England will not cut interest rates later in the week, while the pound dropped against the euro, which was buoyed by Germany's spending plans.

The pound continued to be driven by developments in Europe and the United States. Germany was about to vote on a massive state borrowing programme to fund infrastructure and military spending, while the U.S. threat of tariffs has increased uncertainty about the global economic outlook.

The euro hit fresh highs against the dollar and the yen on Tuesday, ahead of the possible approval of the fiscal stimulus in Germany which could boost euro area's growth.

The pound was flat at $1.2992 , after hitting $1.3005, its highest level since November 7.

The BoE will likely stick to its mantra of only gradual moves ahead as it grapples with the fallout from U.S. President Donald Trump's trade war and mixed news on Britain's economy.

Versus the euro, the pound was down 0.15% at 84.19 pence , having weakened sharply from around 82 pence per euro in early March, on the back of Germany's massive spending plans. Reuters