Sterling Slumps to Seven-Week Low as US Dollar Remains Strong

The British pound extended its losses to a seven-week low on Thursday as demand for the US dollar remained strong following the Federal Reserve's hawkish meeting.

Against the dollar, sterling fell 0.1% to $1.3369, its lowest level since July 30. This marks the fourth consecutive day of decline against the greenback and the third straight daily loss since Wednesday.

The US Dollar Index rose by less than 0.1% on Thursday, extending its gains for a fourth consecutive session and hitting a seven-week high. The dollar's advance is attributed to continued strength in the US currency as a preferred investment following the Federal Reserve meeting.

The Bank of England is set to conclude its regular monetary policy meeting later today, with expectations pointing towards leaving UK interest rates unchanged at 3.75% for a sixth consecutive meeting. If the Bank and Governor Andrew Bailey deliver more hawkish comments than markets currently anticipate, it could increase expectations for a UK interest rate hike in November, potentially easing downward pressure on sterling.