Investing.com -The pound dipped against the dollar on Wednesday ahead of the Federal Reserve’s policy statement later in the session as investors remained cautious amid expectations for reduction in stimulus, while renewed concerns over emerging markets also weighed.
GBP/USD hit session lows of 1.6526 and was last down 0.08% to 1.6565.
Cable was likely to find support at 1.6475 and resistance at 1.6667, Friday’s high and an almost two-and-a-half year high.
The U.S. central bank was expected to roll back its asset purchase program by another $10 billion, to $65 billion per month. The central bank announced the first cut to its stimulus program in December.
A renewed selloff in emerging market currencies hit investor confidence after South Africa’s central bank hiked interest rates to 5.5% from 5% in a bid to arrest the steep decline in the rand.
The rand initially rose against the dollar, before tumbling to five year lows.
Turkey’s lira also weakened against the dollar, falling back to levels seen before Tuesday’s night’s dramatic rate hike by Turkey’s central bank.
Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Fed stimulus and concerns over a possible slowdown in China.
Elsewhere, sterling was little changed against the euro, with EUR/GBP inching up 0.04% to 0.8546.
The euro touched session lows earlier after European Central Bank council member Christian Noyer said any rise in the euro's exchange rate would be negative.