Investing.com — Sterling and the euro edged marginally higher on Wednesday as currency markets drew comfort from Fed Chair nominee Kevin Warsh’s Senate testimony, which reassured investors on the question of Federal Reserve independence without materially shifting rate expectations.
As of 03:55 ET (07:55 GMT), rose 0.16% to 1.3525, trading within a day’s range of 1.3498 to 1.3535, while added 0.09% to 1.1754, holding well within its session band of 1.1734 to 1.1763.
Warsh, appearing before the Senate on Tuesday, sidestepped specific policy commitments while firmly defending the Fed’s institutional independence, a stance that analysts said was sufficient to avoid a Treasuries-driven dollar surge.
The dollar itself remained broadly rangebound, with the struggling to reclaim the 99 level amid resilient equity markets.
The has gained roughly 3% since the onset of the US-Iran conflict, removing a key pillar that might otherwise have supported a more durable greenback recovery.
Analysts at ING noted the dollar’s rebound potential remains constrained by the equity backdrop, with European equities not underperforming sharply enough to drive EUR/USD meaningfully lower.
The brokerage sees the pair consolidating around the 1.172-1.177 range absent tangible diplomatic progress, with dip-buying likely to persist around 1.167-1.170.
For sterling, UK inflation data released Wednesday delivered no major surprises. Energy costs lifted headline CPI while core services inflation remained broadly flat, reinforcing expectations that the Bank of England will hold rates next week.
ING maintained its view that the BoE is likely on hold through year-end, with inflation seen peaking near 3.5-4% rather than at levels that would force policy action.
Political noise continues to hover over the pound, with markets keeping a cautious eye on Prime Minister Keir Starmer’s domestic standing ahead of 7 May local elections, where Labour is widely expected to underperform.
The broader geopolitical backdrop remains unresolved. President Trump announced a last-minute ceasefire extension, but the Strait of Hormuz situation remains fluid, with the US blockade intact and fresh reports of an incident involving a UK container ship.
Direction for both pairs will continue to be dictated by war headlines, oil price movements and any further signals from Fed officials.
