Sterling was steady after a nearly 1% drop in the previous trading session, as United Kingdom (UK) Prime Minister Keir Starmer's office backed under fire Finance Minister Rachel Reeves, hoping to allay investor worries about Britain's finances. 

British government bonds also tumbled on Wednesday, as a tearful appearance by Reeves in parliament a day after the government backed down on welfare reforms stoked fiscal concern.

The Pound last fetched $1.3628, while the Euro eased a touch to $1.1788, still near the September 2021 top it hit earlier this week. The Yen was a tad weaker at 143.84 per Dollar. 

Currency Strategist Carol Kong at Commonwealth Bank of Australia said market participants are worried Reeves could be replaced with someone less committed to the government's self-imposed fiscal rules and more willing to borrow. 

"The Pound can remain under downward pressure unless the UK government takes measures to restore market confidence in UK finances."

The US Dollar index, which measures the greenback against six other currencies, was 0.11% higher at 96.862, remaining close to the 3-1/2-year lows it has been rooted to this week. 

The index is on course for a 0.5% drop for the week. 

Investor attention will turn to the US Labour Department's comprehensive employment report for June, due for release on Thursday ahead of the July 4 holiday, after data showed private payrolls fell for the first time in more than two years in June. 

--Reuters--