# Sterling steadies vs dollar ahead of BoE, ECB meetings Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-01-30 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: GBP Falls Ahead of BoE Rate Hike Expectations Meta Description: Sterling edges lower against the dollar ahead of central bank meetings. Markets pricing in a 50 basis point increase. Stay updated with Reuters. URL: https://financedigest.com/sterling-steadies-vs-dollar-ahead-of-boe-ecb-meetingshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-01-30t121040z1lynxmpej0t0h5rtroptp4cashplus-fundraising-1736814529881-compressed.jpg) By Joice Alves LONDON (Reuters) – Sterling edged lower against the U.S. dollar on Monday [ahead of a number of central bank meetings](https://www.financedigest.com/stay-ahead-of-the-curve-and-meet-your-customers-payments-needs.html "STAY AHEAD OF THE CURVE AND MEET YOUR CUSTOMERS PAYMENTS NEEDS") this week including the Bank of England’s, which is expected to hike rates for the 10th consecutive time. The [BoE looks on course for its first rate](https://www.financedigest.com/fed-rates-up-boe-up-ecb-up-stocks-up.html "Fed rates up, BoE up, ECB up, stocks up") rise this year, with markets pricing in a half percentage point increase to 4% on Thursday. [Sterling edged 0.14% lower](https://www.financedigest.com/sterling-edges-lower-ahead-of-key-data.html "Sterling edges lower ahead of key data") against the U.S. dollar at $1.2380, [trading not far from a seven-month high of $1.2381 touched](https://www.financedigest.com/idbi-capital-markets-securities-india-rolls-out-apple-watch-voice-and-touch-based-trading.html "IDBI Capital Markets & Securities (India) rolls out Apple Watch voice and touch based trading") last week. Simon Harvey, head of FX Analysis at Monex, said sterling performance has been largely uneventful but that it is not any indication on how the [currency will be trading](https://www.financedigest.com/currency-trading-in-a-spin-after-polish-explosion.html "Currency trading in a spin after Polish explosion") this week. Not only do GBP traders have to face up to fresh interest [rate decisions from major central banks including the BoE](https://www.financedigest.com/uk-economys-unexpected-bounce-spurs-more-boe-rate-hike-talk.html "UK economy’s unexpected bounce spurs more BoE rate hike talk"), but it will also have to trade amid a volatile cross-asset risk environment as markets are set to receive the first official gauge of how China’s reopening is playing out,” he said. Monex sees [higher risks towards a lower terminal rate](https://www.financedigest.com/dollar-jumps-as-powell-flags-higher-terminal-rate.html "Dollar jumps as Powell flags higher terminal rate") than markets are pricing, “but this isn’t necessarily GBP negative”, Harvey said. Markets are currently pricing in an 80% chance of a [BoE 50 basis point hike](https://www.financedigest.com/boe-raises-rates-again-as-investors-look-towards-end-of-hikes.html "BoE raises rates again as investors look towards end of hikes"). \[IRPR\] Sterling fell 0.4% against the euro to 88.00 pence on the back of higher [inflation in Spain bolstering expectations](https://www.financedigest.com/dollar-drops-as-inflation-cools-more-than-expected.html "Dollar drops as inflation cools more than expected") for the European Central Bank, which is also expected to hike interest rates by half a percentage point on Thursday. POLITICAL SCANDAL Sterling has risen 2.4% against the dollar this [months after recording last year its biggest annual drop since the Brexit](https://www.financedigest.com/6-months-to-go-until-brexit-and-investor-sentiment-remains-bold.html "6 months to go until Brexit and investor sentiment remains bold") referendum in 2016. Following a chaotic 2022 that saw three different [British prime ministers, British Prime Minister Rishi Sunak](https://www.financedigest.com/british-pm-rishi-sunak-pledges-further-action-on-strikes-to-protect-lives.html "British PM Rishi Sunak pledges further action on strikes to ‘protect lives’") said on Monday he would do whatever was necessary to “restore integrity” when asked about the sacking of Conservative Party chair Nadhim Zahawi. In the latest scandal to hit one of Sunak’s top ministers, an [investigation found Zahawi committed a serious breach by not being open](https://www.financedigest.com/india-opens-new-investigation-into-bbc-in-widening-crackdown.html "India opens new investigation into BBC in widening crackdown") about a tax probe. [Sunak also said Britain](https://www.financedigest.com/pm-rishi-sunak-sets-out-priorities-for-britain-responds-to-critics.html "PM Rishi Sunak sets out priorities for Britain, responds to critics") should not put taxes up any further in response to a question about public sector pay. British finance minister Jeremy Hunt promised on Friday to tackle the country’s weak productivity with [post-Brexit reforms](https://www.financedigest.com/post-brexit-insurance-reform-clear-before-december-says-boes-woods.html "Post-Brexit insurance reform clear before December, says BoE’s Woods") to boost growth. (Reporting by Joice Alves) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---