Sterling steady as investors await inflation data

The pound sterling held steady on Wednesday, trading at $1.2443 against the dollar and dipping slightly to 83.37 pence per euro, as investors awaited US inflation data due at 1330 GMT.

The data could solidify expectations for the Federal Reserve to maintain current interest rates, following Fed Chair Jerome Powell’s comments on the economy’s strength.

Meanwhile, markets anticipate further easing from the Bank of England after last week’s 25 basis point rate cut. BoE policymaker Catherine Mann surprised markets by supporting a larger 50 basis point cut, citing weak consumer demand and labour market risks.

Concerns over US President Donald Trump’s trade policy also weighed on investor sentiment. Trump’s pledge to impose reciprocal tariffs on countries taxing US imports fuelled fears of an escalating trade war. However, analysts believe the UK may be less vulnerable to US tariffs due to its trade surplus with the US.

Attribution: Reuters

Subediting: M. S. Salama