On Tuesday, the pound retreated from session lows against the dollar after release of data, which showed that the UK annual inflation remained in negative territory in October as the cost of food, alcohol, and tobacco have put pressure on the consumer price index.
GBP/USD pair is at 1.5206 after 1.5173 on the eve of the report.
The Office for National Statistics said that the rate of UK inflation fell to 0.1% last month, in line with expectations, after a 0.1% weakening in September.
The annual inflation rate showed a decline for two consecutive months for the first time since 1996, when the statistics started to be monitored.
The consumer price index fell 0.1% in monthly terms, confounding forecasts in September after declining 0.1%.
However, core inflation, excluding the cost of food, energy, alcohol, and tobacco rose last month by 1.1%, above the forecast of growth by 1.0%, compared with 1.0% in September.
The data also showed that house price index rose in September by 6.1%, beating the forecast of growth by 5.4%, after increasing in August by 5.5%.
The Bank of England has predicted that inflation will remain close to zero for the end of the year, reinforcing expectations that interest rates will remain at current record low levels for a longer term.
Sterling rose against the euro; EUR/GBP retreated by 0.2% to 0.7016.
On Tuesday, the euro came under renewed selling pressure as investors moved the focus from the Paris event back to the diverging outlook for monetary policy between the Fed and other central banks around the world.
Demand for the dollar is still supported by expectations that the Fed will raise interest rates next month.
US inflation data, scheduled for release today, is expected to bring further clarity about the prospects for a rate hike in December.
At the same time the European Central Bank, according to forecasts, will expand its quantitative easing program, and possibly will lower rates at its December meeting.
The euro remained under pressure amid fears that terrorist attacks in Paris could weaken an already fragile economic recovery in the region.
The USD index, which tracks the US currency against a basket of six major rivals, is at 99.59, after rising earlier to a seven-month peak of 99.74.