GBP Slips as Markets Expect Fed Rate Hike Above BoE Level

The British Pound (GBP) weakened against the US Dollar (USD) on Wednesday to around 1.3470, down 0.2% from Tuesday's close.

This move comes as traders await the release of UK August Consumer Price Index (CPI) inflation data and the Federal Reserve's (Fed) interest rate decision later in the day.

Markets are increasingly convinced that the Fed will hike its benchmark interest rate by 25 basis points at its September policy meeting, in response to a jump in energy prices that pushed underlying inflation higher than expected in August.

The Pound has drifted lower as the Fed's interest rate is set to surpass the Bank of England's (BoE) rate, which currently stands at 3.75%.