Pound notes
Sterling holds three-week low after BoE decisionReuters/Catherine Benson

The UK currency was little changed from a three-week low after the Bank of England policy review on Thursday left the Bank Rate and the asset purchase target unchanged.

The market focus has now shifted to the UK inflation expectations survey and the US jobs report scheduled for Friday.

GBP/USD traded at 1.5246 about an hour after the policy decision, slightly off the day's low of 1.5225, its lowest since 12 February. At the low, the pound was 0.24% down on the day, adding to the 1.1% loss made from Monday to Wednesday.

Britain's inflation expectations for the next 12 months has fallen to a six-year low in February and longer term expectations were stable at a record low as per a survey report published on 3 March.

The monthly Citi/YouGov survey found year-ahead inflation expectations decline to 1% in February, the lowest level since late 2008, from 1.2% in January, Reuters reported.

Expectations for inflation over the next five-10 years were stable at 2.6%, the survey showed.

Friday's survey is by the central bank itself. The February survey has predicted a 12-year horizon inflation at 2.5%.

UK's CPI inflation has hit its lowest level on record in January. The central bank keeps its view that the next rate move will be a hike from 0.5% but adds that it is also ready to make a cut before moving on to the tightening cycle if deflation deepens.

The European Central Bank also left rates unchanged at Thursday's review, but the common currency made mild gains after the announcement.

EUR/USD rose to 1.1078 post the decision from near 1.1057 prior and EUR/GBP edged higher to 0.7562 from 0.7552.

Friday's US jobs data may show that the non-farm job additions may have dropped to 240,000 in February from 275,000 in January but the unemployment rate may have decreased to 5.6% from 5.7%.

The US data outcome is likely to set the tone for the euro as well as Sterling next week, as the common currency is now at a 11-year low against the dollar while the USD index is holding at a 11-year high.

Sterling is on a downtrend since the last week of February and is not far away from the multi-month low of 1.4951 touched on 23 January.