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According to Reuters, sterling hit a ten-day low of $1.6123 before recovering to $1.6146, as the market waits to see if the Bank of England (BoE) opts to up the interest rate at 12:00 GMT.
Last month, the BoE decided to keep the base rate at a record low of 0.5 per cent, despite a third policymaker voting for a rise.
But traders have said it would be a surprise if the Bank were to increase the interest rate this early in the year, with May being tipped as a more likely time.
However, the pound also rose against the euro this morning as the single currency decreased by 0.15 per cent.
This comes after the euro dropped by 0.3 per cent versus the pound yesterday afternoon.
Posted by Greg Secker
