Sterling ticked higher against the Dollar and remained largely flat versus the Euro as investors awaited the Federal Reserve’s policy decision later in the session and UK economic growth data due on Friday.

Meanwhile, the Dollar eased against the Euro and Yen, with markets anticipating a potentially hawkish rate cut from the Fed.

The Pound gained 0.10% against the Dollar, trading at $1.3313, after reaching $1.3385 last week, its strongest level since 21^st October, Reuters reports.

Overall, the currency has strengthened by roughly 1% since Chancellor Rachel Reeves presented the budget last month.

Sterling benefited from post-budget relief, as much of the negative news had already been priced into markets before 26^th November. Going forward, Sterling will probably require positive growth news to outperform its European counterparts, according to analysts.

Furthermore, some analysts noted slightly positive revisions to last week’s PMIs, indicating that Britain’s economy isn’t slowing as much as markets had feared.

Other firms reported that uncertainty surrounding the Chancellor’s 26^th November budget had led them to postpone investment in new projects.

Expectations of slower UK growth indicate that the Bank of England could potentially deliver more interest rate cuts than the market currently anticipates, say reports.

UK GDP figures are set to be released on Friday.

Investors are also awaiting next week’s Bank of England rate decision, with policymakers showing mixed signals about the monetary policy outlook on Tuesday, indicating ongoing division within the Monetary Policy Committee.

Traders currently forecast a total of 50 basis points in BoE rate cuts by next summer and assign roughly a 90% probability of a cut next week.

Moreover, the Euro rose 0.02% against the Pound, trading at 87.43 pence, after hitting 87.21 pence on Tuesday, its lowest level since 24^th October.

Support for the Euro came as money markets recently reduced expectations of potential European Central Bank rate cuts.