On Tuesday, the pound fell to session minimums against the dollar after the release of UK data, which indicated a negative inflation rate last month for the first time since 1960.
The pair GBP/USD fell 0.63%, getting to 1.5555 from around 1.5576 the day before publication.
The UK Office for National Statistics reported that the annual inflation rate fell in April by 0.1% after no change in the previous two months. Economists had forecasted that the annual inflation rate will remain unchanged at zero.
The consumer price index (CPI) rose by only 0.2% for the month, compared with the forecasts that said about an increase of 0.4% in March, after rising by 0.2%.
The ONS said that the decline in inflation was due to a decrease in transportation costs, yet the alcohol, clothing and household goods also fell in annual terms.
Last week, the Bank of England Governor, Mark Carney, said the bank predicts decline in inflation in the short term, however, he confirmed that the prices will rise again in the coming months, before returning to the target of around 2% within two years.
The recent data, showing the salary growth is gaining momentum, compensated the concerns about the possibility of a prolonged period of deflation.
The pound rose against the euro, with EUR/GBP gaining 0.44% to 0.7195.
The euro came under renewed pressure on Tuesday after a senior official of the ECB, Coeure Benoit, said that the central bank intends to increase its purchases of euro zone assets in May and June, in anticipation of the expected period of low liquidity in the summer.
Concerns about Greece have also continued to put pressure on the European currency, even though today's statement of the Minister of Labor of the country said that the agreement with creditors will soon be reached.