The pound traded cautiously ahead of the Bank of England (BOE) policy meeting tonight.
While the central bank is not expected to change its current interest rates and bond -buying program, a statement from the BOE will be the main focus of investors to get clues for the next monetary policy setting.
Among the concerns of investors at the moment is the central bank's view on the inflation rate which has soared above the BOE's 2% target last month.
BOE chief economist Andy Haldane had previously expressed his concern over inflationary pressures and he was also the only member of the Monetary Policy Committee (MPC) to support reduced bond purchases.
Haldane will likely voice his concerns again for the last time before he leaves the post and tonight’s meeting will be the last for him.
The pound traded slightly lower against the US dollar hovering around 1.39500 at the start of the European session.
Meanwhile, the US dollar remained traded stable as investors assessed various opinions from Federal Reserve (Fed) policymakers about the appropriate time for monetary stimulus measures to be reduced.
The release of Gross Domestic Product (GDP) data, US unemployment claims and the speeches of several other Fed policymakers tonight will also be the main focus of the market.
