LCU:Sterling rises versus weak dollar, shrugs off BoE minutes
* Pound lifted versus dollar by dovish Bernanke comments
* Dips briefly as BoE minutes suggest no rush to raise rates
* Raft of recent upbeat data seen supporting pound
By Jessica Mortimer
LONDON, Nov 20 (Reuters) - Sterling rose against a weak dollar on Wednesday after U.S. Federal Reserve Chairman Ben Bernanke said the central bank would maintain its ultra-easy monetary policy for as long as needed.
It reversed brief falls after Bank of England minutes showed policymakers felt there were no major inflation risks and there would be no rush to raise interest rates.
With the BoE still more likely to raise interest rates due to a raft of recent strong UK data while other central banks stick to a highly accommodative monetary policy, analysts said the pound was likely to remain strong.
The minutes said there was a case for not raising the bank rate immediately when the 7 percent unemployment threshold was reached.
Sterling was up 0.2 percent at $1.6152, having dropped to around $1.6117 after the BoE minutes.
BMO strategist Stephen Gallo said the market had been "consistently overinterpreting the upbeat message from the BoE". This may "restrain gains" in sterling but it was likely to continue to outperform other currencies in coming months.
"We will have to see the Bank of England consistently downplay a fall in the unemployment rate over the next six months or so and eventually the pound should fall."
The euro was down 0.2 percent at 83.77 pence, though it stayed above a low of 83.00 pence hit after the European Central Bank unexpectedly cut interest rates earlier this month.
Strong chart support for the euro was seen at 83.33 pence, equivalent to 1.20 pence per euro and a level where UK importers often look to sell the pound.
"We could see some profit taking on long sterling positions in the immediate aftermath of the minutes. Sterling remains a buy on dips however and we think that sterling could do well in coming days," Citi strategist Valentin Marinov said in a note to clients.
Focus later in the day will switch to the minutes of the Federal Open Market Committee's October meeting. Any signs that U.S. policymakers are in no hurry to scale back monetary easing could further weigh on the dollar and help the pound.
