On Tuesday, the pair fluctuated as the dollar remained vulnerable before the Fed meeting, where the impact of the S&P cut to U.S. sovereign rating by one step to AA+, losing its top rating for the firs time since 1941, was still prevailing, lowering demand on high-yielding currencies.
Grim manufacturing and trade reports from theU.K.caused the pound to snap its earlier advance. Manufacturing production fell 0.4% in June compared with the prior 1.8% expansion, while visible trade deficit widened to 8873 million pounds in June from the revised deficit of 8467 million pounds, adding to worries the growth pace is slowing.
On Wednesday, the awaited inflation report will be available at 09:30 GMT; thereafter, theUSwill release MBA mortgage applications for August 5 at 11:00 GMT followed by monthly budget statement at 18:00 GMT.
The inflation report is predicted to have an impact on the pair if the growth or inflation expectations came higher than estimated as investors will wait to see the outlook for the bank and thereby predict its monetary action over the coming months.