The British pound declined in European trading on Thursday against a basket of global currencies, extending its losses for a fourth consecutive session against the US dollar and hitting a four-week low. The move comes as investors continue to favor the US currency after the Federal Reserve meeting minutes showed that policymakers are not rushing toward interest rate cuts.

UK consumer price data showed continued easing in inflationary pressures on policymakers at the Bank of England, which increased expectations for a UK interest rate cut in March.

Price Overview

British pound exchange rate today: The pound fell 0.1% against the dollar to $1.3480, the lowest level since January 22, from an opening level of $1.3494, recording a session high of $1.3502.

The pound lost 0.55% against the dollar on Wednesday, marking its third consecutive daily loss, pressured by UK inflation data.

US Dollar

The dollar index rose 0.1% on Thursday, extending gains for a fourth straight session and reaching a two-week high at 97.78 points, reflecting continued strength of the US currency against a basket of global currencies.

Minutes from the latest Federal Reserve meeting, held on January 2728, showed divisions among policymakers regarding the appropriate path for US interest rates. The minutes indicated that the incoming Fed chair, expected to take office in May, may face challenges in pushing through any rate cuts.

The minutes also showed that some members expect productivity gains to help ease inflationary pressures, while most participants warned that the path toward lower inflation may be slow and uneven. Some members even hinted at the possibility of raising interest rates again if inflation remains above target.

Following the minutes, and according to the CME FedWatch tool, market pricing for keeping US interest rates unchanged at the March meeting rose from 90% to 95%, while expectations for a 25-basis-point rate cut dropped from 10% to 5%.

UK Interest Rates

Data released on Wednesday in the UK showed headline consumer inflation rising 3.0% in January, in line with market expectations, marking the lowest reading in the past ten months, down from 3.4% in December. Core inflation also eased to 3.1% from 3.2%.

These figures indicate continued easing of inflationary pressures on policymakers at the Bank of England.

Following the data, pricing for a 25-basis-point rate cut by the Bank of England in March increased from 85% to 90%.