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mpc: 4 The main financial market development, however, had been the appreciation of sterling: its effective rate was more than 2% higher on the month. That took the effective rate to about 5% above its level at the turn of the year, returning it to the range in which it had been trading at the beginning of 2003. Its movements did not, on this occasion, seem simply to reflect movements in US dollar exchange rates: sterling was stronger against a wide range of currencies. Given the similarity of yield curve movements, relative interest rates could account for only a small proportion of sterling's recent appreciation ­ which ruled out a purely cyclical explanation. A UK-specific explanation therefore seemed to be required.