May 21 Reuters The pound was within striking distance of its 2month high versus the dollar on Tuesday but was set to break a sevenday winning streak against the euro ahead of key economic data.

Closelywatched consumer price inflation data is due on Wednesday and flash PMI data on British business activity will follow the next day.

Good risk appetite and a slightly more dovish repricing of expectations for European Central Bank monetary path have supported the pound in the last one and a half weeks, analysts said, mentioning its correlation with the U.S. stock index SP.

Market participants see sterling as riskier than the safehaven dollar and the single currency.

The pound dropped 0.05 at 85.44 euro per pound , after rising for seven sessions from around 86 pence on May 10.

Since the last Monetary Policy Committee MPC meeting, it has been well understood that the June rate cut scenario depends on this week39;s CPI and the next one due June 19, said Paul Mackel, global head of forex research at HSBC.

We maintain GBPUSD is expensive versus what interest differentials imply, he added, recalling that the Bank of England39;s BoE Chief Economist Huw Pill, who has been more guarded about the disinflation, will speak on May 24.

BoE Governor Andrew Bailey said on May 9 that future cuts might need to be more than those markets priced in, but the next day Pill said that betting too heavily on a rate cut at its June rate meeting would be a bad idea.

Policymaker Megan Greene…