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According to Reuters, a hike in Britain's tax levy on banks led to the latter decreasing against its European counterpart.
But forex traders limited moves as they wait to see if the Bank of England is going to raise the interest rate from its record low of 0.5 per cent on Thursday.
Ian Stannard, senior currency strategist at BNP Paribas, noted the steam had been taken out of the pound - which was flat against the dollar this morning - because of the levy rise today.
He added: "We think sterling's going to struggle now given the extent of the rate hikes that have been priced in. Things are swinging back to sterling reacting more to negative news."
Britain has increased its tax on banks by an additional £800 million.
Posted by Greg Secker
