LONDON, April 4 Reuters The British pound rose to a new 10month high against the dollar on Tuesday, and the euro reached its highest in two months, as the U.S. currency continued to suffer from market bets that the end of the U.S. ratehiking cycle is near.

Sterling rose 0.84 to 1.2521, its highest since June 2022, after breaching a significant resistance level.

1.2448 has been a huge technical chart resistance. It has been a high twice this year, said Joe Tuckey, head of FX analysis at Argentex.

Shortterm spreads between core Europe and the U.S. are more consistent with eurodollar trading near 1.10 to 1.15.

U.S. and European government bond yields fell dramatically last month as investors rushed to buy safehaven assets due to fears about the banking sector, and while they have rebounded a little they remain well below recent highs.

The German twoyear yield has dropped 70 basis points since its March highs and was last at 2.687, but U.S. moves have been even more dramatic.

The U.S. twoyear yield was last at 3.9978, down a full percentage point from its early March highs, after the banking turmoil caused traders to reassess expectations that there were still several Federal Reserve rate hikes ahead.

Market pricing presented by CME39;s Fedwatch tool indicates around a 45 chance Fed rates are at their current level 4.755.0 by July, in three ratesetting meetings time, with a 15 chance they39;re at 4.54.75, and a 35 chance they are at 5.05.25.

The latest data to…