On Wednesday, the pound was at a recent two-week low against the dollar..Hovering around 2667, market participants are awaiting the outcome of the policy meetings of the Federal Reserve and the Bank of England。

Earlier today, figures from the Office for National Statistics showed that the UK's annual inflation rate fell to 3 per cent in February from 4 per cent in January and December..4%, lower than expected, while reinforcing the Bank of England's argument for a rate cut。

This is the lowest level since September 2021, mainly due to slower price increases for food and non-alcoholic beverages, restaurants and hotels, entertainment and culture, and other goods and services.。

The UK's annual core CPI inflation rate (excluding volatile categories such as food and energy) for February was up from 5 in the previous three months..1% down to 4.5%, the lowest core inflation rate since January 2022。

The figures were released a day before the Bank of England's second policy meeting this year.。

The Bank of England is expected to keep its benchmark interest rate at 5 at its fifth consecutive meeting in March..16-year high of 25% unchanged。In February, two monetary policy members voted for a 25 basis point rate hike, while one member voted for a 25 basis point rate cut.。

The Bank of England says monetary policy must be maintained long enough to bring inflation down to its 2% target level sustainably over the medium term。However, the central bank removed references to further tightening of monetary policy from its statement, noting that inflation risks were more balanced.。

And on the Fed side,Investors adjusted their expectations for the pace and size of the Fed's rate cuts this year as both consumer and producer-level inflation showed persistent signs。This has supported the dollar over the past few sessions.。

The market has now priced in a 73 basis point Fed rate cut, compared with 150 basis points in early 2024.。According to the Chicago Mercantile Exchange FedWatch tool, the market now expects a 59% probability of a Fed rate cut in June。

Nicholas Chia, Asia macro strategist at Standard Chartered Bank, said: "Given the recent rebound in inflation, the market will be closely watching the Fed's decision to see if it will adjust its mid-point forecast for this year from three rate cuts to two.。"

As of 9: 52 GMT on Wednesday, the pound was down 0 against the dollar..26%, trading at 1.2688。