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mpc: 3 The US dollar effective exchange rate had appreciated by about 2½% since the Committee's April meeting. Changes in interest differentials, to which the stronger US economic data had contributed, substantially accounted for the upward movement. Against that background, the effective exchange rate for sterling had fallen by over 2%. Changes in interest differentials could broadly account for the depreciation of sterling against the dollar, but only for a small part of its smaller depreciation against the euro, which had a much larger weight in the sterling effective exchange rate index. Overall, sterling still stood around 1% above the 15-day average incorporated into the February Inflation Report projections.