Investing.com — Sterling traded lower on Wednesday while the euro fell to its weakest against the pound in 16 months, as firmer oil prices steadied the dollar ahead of Federal Reserve minutes and French fiscal worries weighed on the single currency.
Sterling fell 0.59% to $1.31999, while the euro dropped 0.71% to $1.1180. EUR/GBP slipped 0.13% to 0.8471, touching a low of 0.8448, as of 09:40 ET (13:40 GMT).
Sterling rose against the euro for a ninth straight session, reaching a 16-month high, and was up 0.13% at 1.1806.
Brent briefly dipped below $100 a barrel on Tuesday before recovering on reports Iran had stepped up tanker strikes in the Strait of Hormuz.
“With few signs of an imminent deal, energy prices should remain a drag on any meaningful recovery in bonds and, by extension, on a decline in the dollar,” said Francesco Pesole, FX strategist at ING.
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The Fed’s September minutes are due later today. The hawkish September dot plot had four members expecting two more hikes this year against two expecting none.
“The scope for a dovish surprise appears limited,” Pesole said. Data has been softer since the September hike, but markets still firmly price a December move, “setting a relatively high bar for a positive USD reaction.” No individual Fed speakers were named in the sources.
EUR/GBP’s low was its weakest since June 2025 and broke below a 2026 low set in July. France faces a deepening bond crisis over missed deficit targets, policy gridlock and presidential elections next year.
Far-right candidate Marine Le Pen on Tuesday urged the European Central Bank to intervene to curb debt costs, and Spanish Prime Minister Pedro Sánchez’s call for snap elections added regional risk.
Swaps now favour three quarter-point ECB hikes by September 2027, down from four early last week.
The euro welcomed a tighter French 10-year spread to bunds of 125 basis points, but the rebound faded on oil. “We therefore aren’t convinced her words are enough to drive a material OAT recovery from here,” Pesole said of Le Pen’s pledge to cut the deficit to 3.7% of GDP. “A return towards 1.1150/1.1180 remains the risk today.”
ING expects DXY to stabilise around 102.0, with risks skewed higher, and sees EUR/USD risk at 1.1150-1.1180 near term. It gave no GBP target. A durable dollar decline would need an Iran deal and a bond recovery that pulls oil lower. A euro rebound would need a broader improvement in sentiment on France’s fiscal outlook, which ING calls “premature.”
Original Article
Sterling today: Pound dips on firm dollar; EUR/GBP at 16-month low
Global yield sell-off resumes as U.S. 30-year yield touches 24-year highs
Euro languishes as Indian rupee tests all-time lows; Dollar awaits FOMC minutes
