The pound stumbled against the dollar today as traders remained cautious ahead of the Bank of England’s policy meeting next week.
Sterling was down 0.2 per cent at $1.392, while holding its ground versus the euro.
It brings yesterday’s nine-day high to an end, which followed a slump in the dollar after the Fed waved off talk of shifting its monetary policy.
The dollar bounced back slightly with a 0.1 per cent rise but was still poised for a fourth straight weekly decline.
Most analysts do not expect major changes to the BoE’s policy settings next Thursday.
Other market players also see a low likelihood of any tapering of its quantitative easing until the extent of Britain’s economic recovery becomes clearer.
“Our base case is that the monetary policy committee delays any quantitative easing taper to June,” Deutsche Bank analysts wrote.
“This should give the committee confidence around the recovery.”