Currencies | Mon Dec 17, 2012 8:20am GMT

Sterling hits 2-1/2 month high versus dollar

LONDON Dec 17 (Reuters) - Sterling hit a 2-1/2 month high against the dollar on Monday on steady demand from Middle East investors in thin liquidity conditions.

The pound rose to $1.6202, its highest level since Oct. 5. Analysts said the dollar could weaken further ahead of the deadline to resolve U.S. budget problems, which could bolster the British pound. (Reporting by Philip Baillie, Editing by Anirban Nag)