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Pound Sinks Below $1.20 as Traders Eye Gap in BOE, Fed Rate Path

  • Sterling falls to lowest level since March 2020 ahead of FOMC
  • Fed, BOE rate decisions offer further scope for downside
Updated on

The pound sank to its lowest level against the dollar since March 2020 as traders eyed a widening gulf between the Bank of England and Federal Reserve rate-hiking cycles.

The UK currency slid more than 1% on Tuesday, falling below $1.20 for the first time in more than two years and pushing year-to-date losses to 11%. It matched that drop against the euro to 86.77 pence, its weakest since May 2021.