Sterling remained stable in the middle of its recent range on Wednesday as investors awaited crucial US inflation data. Meanwhile, uncertainty surrounding US President Donald Trump's trade policies kept market participants cautious.

The Pound saw minimal movement against the Dollar, trading at $1.2443 at the time of writing, while slipping slightly to 83.37 pence per Euro.

Currency markets were focused on the upcoming US inflation report, set for release at 13:30 GMT, which could reinforce expectations that the Federal Reserve will maintain interest rates at their current level for now.

On Tuesday, Federal Reserve Chair Jerome Powell told lawmakers that the central bank was in no hurry to implement further rate cuts, citing the economy's resilience.

Meanwhile, market expectations for additional easing from the Bank of England have increased following last week's 25-basis-point rate cut, Reuters reports.

Adding to the surprise, BoE policymaker Catherine Mann, previously seen as the most hawkish member of the Monetary Policy Committee, startled markets by advocating for a larger 50-basis-point cut.

Mann stated on Tuesday that mounting evidence of weak consumer demand, the risk of a sharp decline in the labour market, and diminishing corporate pricing power led her to abandon her resistance to rate cuts.

"Confidence in the UK has been knocked because of the growth outlook," stated Jane Foley, senior FX strategist at Rabobank.

"I think Sterling is going to struggle to find the enthusiasm that it had in parts of 2024."

The prospect of tariffs continues to unsettle currency traders.

Investors generally expect US tariffs to bolster the Dollar by altering trade dynamics and prompting other nations to devalue their currencies to counter the impact of these taxes.

Meanwhile, Trump has pledged to impose reciprocal tariffs on any country that levies duties on US imports by today, intensifying concerns about an escalating trade war.

However, Rabobank's Foley suggested that the UK might be more shielded from rising trade tensions compared to other nations.

"Sterling perhaps looks a little less vulnerable than the Euro," she said, adding that the US runs a trade surplus with Britain, which could allow the UK to avoid some of Trump's tariffs.