Sterling slips against charging dollar

The pound was down 0.1% at $1.15045 by 0825 GMT, after falling as low as $1.14545 in early trading.

Sterling had reached as high as $1.1609 a day earlier as media reports offered new details about how incoming Prime Minister Liz Truss is planning to tackle Britains growing energy crisis, before losing steam.

The dollar hit a 24-year high versus the Japanese yen, and tested a two-decade high against the euro, after U.S. economic data reinforced the view that the Federal Reserve will continue to tighten aggressively.

The pound has slid 15% against the dollar this year as British inflation surges to double digits and growth grinds to a halt, with consumers and businesses hit by soaring energy prices.

Truss is set to announce plans on Thursday to help households cope with the surge in gas and electricity bills caused by Russia‘s invasion of Ukraine. Some financial analysts have put the cost of Truss’s reported plan to freeze power tariffs at 100 billion pounds or higher, on top of her 30 billion pounds of tax cut promises.

Analysts said gains for sterling as a result of Truss‘s plans were not certain, with questions remaining over how they would gel with the Bank of England’s tightening monetary policy.

“The net impact of support measures may not be too straightforward as they may easily get mixed in with the implications for BoE policy,” ING analysts wrote in a note. “Cable could re-test 1.1600.”

The U.S. dollar index, which measures the greenback against six major peers, hit a fresh 20-year high of 110.69 early on Wednesday.

A fall for sterling below $1.1413 would take it to its weakest level since 1985, according to Refinitiv data.