NEW YORK (AP) -- The dollar is at a 6-month high against the British pound after the Bank of England predicted rising prices.
The central bank says inflation in the U.K. may rise to 3 percent by summer, above its target, but it will look past higher prices to help the country's flagging economy.
Monetary policy designed to support the economy tends to weigh on a nation's interest rates. Lower rates in turn can weaken a currency, as investors often seek higher returns in other markets.
In midday trading in New York Wednesday, the pound is down to $1.5533 versus $1.5652 late Tuesday.
The dollar is up a bit against the euro, a currency used by 17 European countries, and down slightly versus the Japanese yen.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.