LONDON, March 8 Reuters Sterling steadied on Wednesday after falling to an almost fourmonth low against the dollar as investors paused for breath after the U.S central bank chair said he is prepared for bolder rate hikes.

Sterling flattened at 1.1825 after briefly touching its lowest level against the dollar since November during Asia trading hours.

It sank 1.7 against the U.S. currency on Tuesday when Fed Chair Jerome Powell told U.S. lawmakers that the central bank was prepared to raise interest rates in larger steps.

Against the euro, sterling also levelled out at 89.15 pence, a day after touching its lowest point against the European single currency since midFebruary.

The pound has slipped around 1.6 against the dollar so far in March , while the euro was just 0.3 lower versus the dollar.

The pound39;s higher sensitivity to risk is making it more vulnerable than the euro to Fed hawkishness, said Francesco Pesole, FX strategist at ING, adding that European Central Bank rate hikes expectations was also supporting the single currency.

EuroGBP faces upside risks every time the Feds hawkish messaging hits risk sentiment … Incidentally, at the current juncture, the euro is looking more attractive than the pound, thanks to the ongoing hawkish repricing in ECB rate expectations and a more encouraging domestic outlook, he said.

Taking the Fed39;s lead, money markets are now fully pricing in a 25basispoint increase from the Bank of England later this month. They are…