Pound Steadies as UK-EU Trade Reset Impacts Sterling

The British pound held its ground against the dollar on Tuesday following a significant trade and defense agreement between the UK and the European Union. This comes after the currency reached nearly a three-week high on Monday.

At 1138 GMT, the pound traded steadily at $1.33640 against the dollar, peaking at $1.34030 earlier this week. ING's Chris Turner noted the UK-EU deal had a positive, albeit mild, impact on sterling.

Traders are also considering comments from BoE Chief Economist Huw Pill, who indicated recent interest rate cuts might just be a pause. The upcoming UK consumer price index readings are eagerly anticipated by market observers.

(With inputs from agencies.)