The Pound continued its decline on Wednesday as the International Monetary Fund criticised the government’s spending plans.

Sterling edged down 0.56% to $1.068, whilst the Euro rose 0.13% against the Pound to 0.895.

On Tuesday, the International Monetary Fund issued a statement saying: "We do not recommend large and untargeted fiscal packages" at a time of high inflation. It proposed the UK government "re-evaluate" its plans.

In addition, Moody’s ratings agency said the planned tax cuts were "credit negative" and would likely weigh on growth, Reuters reports.

However, the decline in Sterling on Wednesday was also down to the strength of the Dollar, according to UBS head of foreign exchange strategy, James Malcolm.

The Dollar index – measuring the greenback against major peers – reached a new 20-year high of 114.78, and at the time of writing was up 0.42%.

"I think we need to put this in context, Sterling's basically consolidating here. I think it's just as likely that the Pound recovers somewhat from here as that it sells off further,” he stated.

Malcolm said the Pound is "fairly priced" after plunging more than 20% over the last year.

In addition, ING analysts commented: "Resistance (to Dollar strength) is futile.

"Whether it be U.S. data surprising on the upside, the U.S. Administration showing no concern at all with the strong Dollar, or new chapters in the energy war in Europe, it looks like all systems are go for the Dollar rally. Trying to pick a Dollar top in the current climate is an exercise in futility,” they added.

Elsewhere, the Japanese Yen bought 144.53 per Dollar, the Reuters report adds, remaining close to its lowest levels in several years. This is despite last week’s intervention to bolster the currency.

In China, the offshore Yuan declined as far as 7.249 per Dollar, the lowest seen since data was made available in 2011.