Pound hits new 26-year high

The British pound struck a fresh 26-year high against the dollar on Tuesday while the euro hovered around its record peak against the US currency. The pound hit $2.0475 -- last seen in 1981 -- as dealers seized on June inflation data in Britain that pointed toward higher interest rates, analysts said. It stood at $2.0460 in late European trading.

"The Bank (of England) will not be happy to see that core inflation climbed to 2 per cent in June, which was its highest level since March 1997 and up from 1.9 per cent in May and 1.8 per cent in April," Global Insight economist Howard Archer said.

Elsewhere, the European single currency rose to $1.3784 in late European trading, compared with 1.3772 late in New York on Monday.

The euro had shot up over $1.38 last Friday for the first time since its creation in 1999, as weaker-than-expected retail sales in the United States compounded concerns about the world's richest economy