LONDON, July 14 (Reuters) - An upbeat global mood among investors and speculation that the Bank of England might yet stop short of cutting interest rates on Thursday pushed sterling almost 1 percent higher against the dollar in early European trade.
At $1.3211, the gains still left the pound short of 1-week highs hit on Wednesday, but it was also up almost 0.5 percent at 84.04 pence per euro. The UK currency topped 140 yen for the first time since Britain voted to leave the European Union three weeks ago.
Money markets have all but fully priced in a quarter point cut on Thursday in the BoE's main rates, at a record low of 0.5 percent since March 2009. But there are doubters, and if the Bank stops short of easing policy it would be likely to give the pound a boost.
"The MPC will probably leave monetary policy unchanged today," analysts from Unicredit said in a morning note to clients.
(Reporting by Patrick Graham; Editing by Jamie McGeever)