ECB interest rate decision later today

Daily Currency Update

Sterling remains buoyant, bolstered by the UK's exemption from recent U.S. metal tariffs and investor optimism regarding the UK's economic outlook, with analysts anticipating a potential test of the 1.3600 resistance level in the coming days.

The euro trades near $1.1430 against the US dollar, retreating from Tuesday's high of $1.1455.  This pullback follows eurozone inflation data falling below the European Central Bank's 2% target, increasing expectations of a rate cut. Markets are now focused on the ECB's upcoming policy decision this lunchtime, with potential implications for the euro's trajectory.

The U.S. dollar index has stabilized around 99.13, recovering slightly from recent lows.  However, ongoing trade tensions and concerns over economic indicators, such as the recent drop in factory orders, continue to weigh on the dollar. Investors are closely monitoring upcoming economic data releases for further direction.