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Sterling retreated to $1.6171 after experiencing a three-week high of $1.6275 yesterday, Reuters reports.
Gavin Friend, currency analyst at nabCapital, said there is a broad risk aversion trade seeing risk in sterling.
But he added: "Having said that, there is good support at $1.60/6025 levels with markets pricing in rate hikes in the coming months."
Yesterday's rise came after the Bank of England's (BoE) February minutes were released, confirming a third member of the Monetary Policy Committee - Spencer Dale - had joined Andrew Sentance and Martin Weale in voting for a hike in the interest rate, which currently stands at a record low of 0.5 per cent.
What's more, this saw the pound make gains against the euro as traders widely believe there will be a BoE base rate increase before the European Central Bank ups its levels.
Posted by Greg Secker
