The Pound sterling fell 0.1% against the US dollar, reaching $1.3346 on Wednesday, while it remained stable against the euro at €1.1581.
The US dollar index rose slightly to 99.67, reflecting cautious investor sentiment ahead of significant central bank announcements.
Investors are anticipating decisions from both the Federal Reserve and the Bank of England. The Fed is expected to maintain interest rates between 3.50% and 3.75%, while the BoE is also widely predicted to keep its benchmark rate unchanged at its meeting on Thursday.
Analysts are especially focused on how the central banks will address a potential new shock in oil prices.
Rabobank strategists have pointed out that the Pound’s strength is diminishing due to persistent inflation driven by rising energy prices, strained public finances, slow economic growth, and increasing political risks.
Enrique Diaz Alvarez from Ebury emphasised that the BoE’s meeting is the “main focus,” particularly regarding how policymakers may respond to sharply rising energy costs.
On a positive note, the FTSE 100 index rose 0.2% to 10,423 points, buoyed by cautious optimism amid ongoing geopolitical and economic uncertainties.
