Pound Falls as Fed Hike Bets and UK Inflation Uptick Weigh on Sterling

The pound sterling fell on Wednesday as investors priced in a near-certain Federal Reserve rate hike and firmer UK inflation data added to the currency's soft tone.

The GBP/USD pair fell by 0.036% to 1.3474, while the EUR/USD rose by 0.07% to 1.1549 as of 04:23 ET (08:23 GMT).

Francesco Pesole, FX strategist at ING, said a dovish hike may not be enough to convey monetary policy discipline and that any openness to further tightening can support the dollar by reinforcing policy credibility.

The Fed is widely expected to deliver a 25 basis point hike to 4% later Wednesday, with markets pricing in 23bp for the meeting, 52bp by year-end, and 89bp by June.