LONDON, Dec 24 Reuters The British pound strengthened modestly in a holidayshortened trading session on Tuesday, but could face a more uncertain path next year as global monetary policy diverges, analysts said.

Sterling was last up 0.1 at 1.2544, set for a 1.6 loss in December, marking a third successive monthly loss.

Against the euro the pound was up 0.14 at 82.92 pence per euro. Sterling has gained more than 4 against the euro so far in 2024 and is back to roughly where it was at the time of the Brexit vote in late June 2016.

The winner of 2024 in the currency market has been the U.S. dollar, which has been lifted by ongoing evidence of the resilience of the economy, and by the diminishing scope for the Federal Reserve to cut interest rates much further.

For much of the year, the pound was the only major currency to show a gain versus the dollar, but that has now unwound, leaving sterling down 1.5 so far this year.

Even so, it is still the bestperformer among the G10 universe. The runnerup, the Chinese offshore yuan is down 2.5, while the biggest laggard is the Norwegian crown , which has lost nearly 12 in value.

Part of the pound39;s appeal has been the prospect of the Bank of England taking longer to lower interest rates than other large central banks, including the Fed.

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