FX.co ★ Pound Near $1.38 Amid Broad Dollar Weakness

The British pound remained just under $1.38, nearing its highest point since August 2021. This strength was bolstered by a weakened US dollar as investors awaited the Federal Reserve’s widely anticipated policy announcement later today, hoping for insights into the possibility of an upcoming rate cut. The dollar fell to its lowest point in nearly four years late on Tuesday following President Trump’s expression of comfort with its recent depreciation. Contributing factors included concerns over a possible government shutdown, a disappointing consumer confidence report, and continued uncertainty regarding US policies, such as renewed tariff threats and critiques of the Federal Reserve's independence. Concurrently, data from the British Retail Consortium (BRC) released on Tuesday indicated rising price pressures in the UK, sparking worries over persistent inflation. This inflationary trend may restrict the Bank of England’s ability to reduce interest rates in the near future.