Pound, Euro fall ahead of inflation data ‎

The British pound and the euro fell on Thursday, while the dollar rose as relief faded over the Bank of England’s intervention in the bond markets.

Investors are awaiting German inflation data.

The British currency jumped on Wednesday to its highest level since mid-June after the Bank of England announced an emergency plan to buy bonds that were suffering from a decline, such as the pound sterling.

But in the face of skepticism about the management of the British economy and expectations about global growth, sterling fell one percent to 1.0776 against the dollar by 0751 GMT, and the euro fell 1% to 0.9642 against the dollar, which recovered.

Prime Minister Liz Truss defended the budget, which includes tax cuts.

“We expect volatility in currencies to remain significant,” said Chris Turner, head of markets at ING. “Attempting to maintain the value of sterling until the 3 November BoE meeting to set interest rates will present a difficult challenge for policymakers.”

Sterling fell to a record low of 1.0327 against the dollar on Monday as investors criticized Britain’s plans to cut taxes funded by a massive increase in borrowing at the same time as the Bank of England struggles to rein in inflation.

The euro also fell slightly after data showed annual inflation in Spain fell to 9 percent in September from 10.5 percent. Investors will closely watch German inflation figures due at 1200 GMT to receive any indication of the European Central Bank’s intention to raise interest rates.