Sterling reached a one-month high against a weakening dollar on Tuesday, remaining flat against the yen. Investors are looking ahead to business activity figures on Thursday and Bank of England Governor Andrew Bailey’s comments at the Jackson Hole meeting on Friday.

Improvement in the British retail sector, as inflation’s impact on consumer spending eases, supported the pound. Sterling climbed 0.15% to $1.3002, briefly touching $1.3012, its highest level since July 17.

As the greenback hit a seven-month low, markets priced in potential rate cuts by the Fed, with traders focused on Jackson Hole for clues.

Meanwhile, euro/sterling rose 0.2% to 85.18 pence per euro. Despite the pound’s strength, it remains susceptible to near-term volatility, especially with ongoing geopolitical risks.