There was little change to Sterling on Wednesday, remaining close to its 11-month low against the Dollar, as rate hike expectations bolstered the greenback.

Investor focus remained on whether the Bank of England would increase rates at its meeting next month, whilst staying alert regarding the impact of the new wave of Covid cases across the continent, Reuters reports.

The Pound rose 0.01% against the Dollar in early Wednesday training. The currency slumped to its lowest level since late December 2020 at $1.334, as Federal Reserve Chair Jerome Powell’s renomination bolstered market expectations of rate hikes in the U.S. in 2022.

Sterling is looking less vulnerable to the Coronavirus pandemic than the Euro, according to ING analysts. That said, markets may be unwilling to speculate that the UK will avoid another severe wave of Covid cases.

Nevertheless, a decisive move under 84 pence against the Euro “may signal investors are starting to price in diverging contagion/growth paths for the UK and the eurozone, something similar to what we saw at the beginning of the vaccination programme in 1Q21,” the analysts said in a research note.

Sterling fell 0.1% at 84.13 pence versus the Euro, after reaching its highest level since February 2020 on Monday at 83.8 pence.

Although the Pound gained support earlier in November from talks of potential rate hikes, investors are increasingly cautious over the outlook for UK yields.

Governor of the Bank of England, Andrew Bailey heightened uncertainty over the weekend regarding a possible rate hike in December, stating the inflation debate in the UK is finely balanced, say analysts.

Earlier this week, Bailey said he could further reduce guidance on central bank policy and that the Bank of England may make decisions on a meeting-by-meeting basis.