LONDON, Jan 31 Reuters Britain39;s pound was falling against a stronger dollar on Wednesday ahead of policy announcements by both the Bank of England and Federal Reserve over the next two days.

The pound was last down 0.2 against the dollar to 1.2671, and was on track to lose around 0.3 this month.

Markets are just positioning themselves before the Fed tonight and Bank of England policy meeting tomorrow, said Kirstine KundbyNielsen, FX analyst at Danske Bank.

Sterling is still one of the better performers in the G10 against the U.S. currency this year as Britain39;s economic performance has been robust and inflation has shown signs of being stickier than in other regions.

Britain39;s economy began 2024 on a stronger footing, the preliminary SP GlobalCIPS UK Composite PMI showed earlier this month, hitting its highest level in seven months.

UK interest rates are likely to be kept unchanged when the BoE announces policy on Thursday, with markets fully pricing the first interest rate cut by the June meeting.

Investors have slashed bets on the number of rate cuts expected from the BoE this year, with markets pricing around 100 basis points of cuts in 2024 or around four quarterpoint cuts. Prior to December39;s inflation figures, released in midJanuary, markets had expected around five 25basispoint cuts.

In contrast, markets are pricing around 130 basis points of cuts from the Federal Reserve and almost 140 basis points of easing from the European Central Bank in…