Dollar Rally Deepens Sterling's Weakness Amid Higher Energy Prices

Sterling remains near its weakest level in almost three months against both the dollar and euro as higher energy prices and expectations of U.S. rate hikes support the greenback.

The pound is on course for its biggest weekly fall against the dollar since May, with investors weighing the Bank of England's steady policy stance against tighter signals from other major central banks.

Sterling trades at $1.322 after hitting a three-month low of $1.32 and is heading for a 1.2% weekly decline against the dollar, according to Reuters.

Francesco Pesole, currency strategist at ING, expects sterling to struggle in the coming months due to doubts about the Bank of England raising interest rates sharply.