Sterling today: The pound ticks up as Warsh’s testimony helps steady currency markets.

Sterling and the euro inched slightly higher on Wednesday, as markets found reassurance in Fed Chair nominee Kevin Warsh’s Senate testimony. His remarks helped ease concerns about the Federal Reserve’s independence without significantly altering expectations for interest rates.

By 03:55 ET (07:55 GMT), GBP/USD had risen 0.16% to 1.3525, moving within a daily range of 1.3498–1.3535. Meanwhile, EUR/USD climbed 0.09% to 1.1754, staying comfortably within its session band of 1.1734–1.1763.

Appearing before the Senate on Tuesday, Warsh avoided outlining specific policy moves but strongly defended the Fed’s autonomy. Analysts noted that this was enough to prevent a Treasury-driven surge in the dollar. As a result, the greenback remained largely rangebound, with the DXY struggling to break back above 99 despite steady equity performance. The S&P 500 has advanced about 3% since the beginning of the US-Iran conflict, reducing a key support factor for a stronger dollar recovery.

According to ING, the dollar’s upside remains limited by resilient equities, as European markets have not weakened enough to push EUR/USD significantly lower. The firm expects the pair to consolidate around 1.172–1.177 in the absence of meaningful diplomatic developments, with buyers likely to emerge on dips near 1.167–1.170.

For sterling, the latest UK inflation figures brought no major surprises. Higher energy prices lifted headline CPI, while core services inflation stayed broadly unchanged, reinforcing expectations that the Bank of England will keep rates on hold next week. ING continues to anticipate that the BoE will maintain its current stance through year-end, with inflation peaking around 3.5–4%—not high enough to prompt policy tightening.

Political uncertainty still weighs on the pound, as markets monitor Prime Minister Keir Starmer’s domestic position ahead of the 7 May local elections, where Labour is expected to underperform.

Meanwhile, the broader geopolitical situation remains unsettled. President Trump announced a last-minute ceasefire extension, but tensions in the Strait of Hormuz persist, with the US blockade ongoing and new reports of an incident involving a UK container ship. Going forward, both currency pairs are likely to be driven by developments related to the conflict, oil price movements, and further signals from Fed officials.