LONDON, April 14 Reuters The British pound edged lower on Friday but remained close to a 10month high against the dollar, supported by improving appetite for risk ahead of a big week of British data that could provide clues on the outlook for monetary policy.

The pound briefly hit its highest level since June 2022 at 1.2545 per dollar on Friday before easing back. It was last down 0.1 at 1.2511.

The catalyst is positive global risk sentiment and broadbased dollar weakness as markets position for a Fed pause, said George Vessey, FX and macro strategist at Convera.

The dollar index , which measures the U.S. currency against six others including the pound, was last down 0.04 and was on track for its longest stretch of weekly losses since 2020, as traders bet on interest rate cuts from the Federal Reserve this year.

In contrast, markets price in around a 65 chance the Bank of England will raise rates by 25 basis points next month and expect another 45 basis points of tightening by yearend.

The BoE has raised its Bank rate 11 times in a row as it battles with sky high inflation, which rose to 10.4 in February.

Inflation data released next Wednesday will be closely watched for clues on the outlook for monetary policy, while labour market data Tuesday, retail sales Friday and the flash SP GlobalCIPS purchasing managers index Friday could also drive movement in the pound.

Expect a lot more focus on the BoE story next week with the release of jobs and inflation data,…