Sterling rose on Tuesday against a basket of major rivals, on track for the first profit in eight days against dollar away from two-week lows as purchases pick up pace near $1.28.
Dollar was hurt ahead of the anticipated Federal Reserve policy decisions, expected to end up with a 0.25% interest rate hike, the last this cycle.
GBP/USD rose 0.3% to 1.2860, with a session-low at 1.2810, after losing 0.25% yesterday, the seventh loss in a row, marking a two-week low at 1.2798 following weak UK data.
Recent data showed the UK manufacturing sector fell into deep recession in July, marking the worst reading in 38 months, with the services sector slowing down sharply as well.
The pound hit a 15-month high back in mid July at $1.3142, and since then it entered a deep selloff wave.
UK consumer prices slowed down to 15-month lows in June, reducing pressure on Bank of England policy makers and hurting chances of another 0.5% rate hike at the next meeting.
Chances of a 0.5% rate hike by the BoE at the August meeting have tumbled with chances of a 0.25% rate hike now increasing to 65%.
