LONDON: Sterling was steady on Wednesday, staying stuck below a four-month peak against the dollar before the release of Bank of England minutes and the outcome of a US Federal Reserve policy meeting.
The minutes of the Bank of England's policy meeting earlier this month will be watched to see whether any of the three policymakers, including outgoing Governor Mervyn King, who previously voted for more quantitative easing, changed their mind this time.
Signs that recent better UK economic data has made policymakers less inclined to ease monetary policy would boost sterling. But traders will still be wary that Mark Carney, who takes up the post of Bank of England governor in July, could adopt a more dovish stance.
Sterling was steady at $1.5647, staying below Monday's $1.5753 peak, its highest since Feb. 11. Traders cited offers at $1.5670 and above $1.5700.
The pound stayed below strong chart resistance at $1.5694, the 200-day moving average, and the 55-week average at $1.5693.
"The minutes should be a broad non-event, but if there are any switches (in votes on quantitative easing), that would have supportive ramifications for sterling," said Jeremy Stretch, head of currency strategy at CIBC.
"(UK) data is relatively supportive in the medium term, but rallies in cable (sterling/dollar) may be worth fading as the US recovery looks further down the track."
Market players will also watch a speech by Mervyn King later on Wednesday.
But the market's main focus will be on the outcome of the Fed rate-setting meeting at 1800 GMT and Fed chairman Ben Bernanke's news conference at 1830 GMT.
Any hint that the Fed could exit money printing soon was expected to push the dollar higher. Analysts expected currencies to stay rangebound before the Fed decision.
The euro was steady at 85.58 pence, after dipping below a peak hit on Tuesday of 85.84 pence. More chart resistance was seen at the late May peak of 85.985 pence.
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