The pound struggled to make any significant ground on Wednesday (4 January 2017), failing to capitalise on better-than-expected reports on the health of Britain's construction sector and of consumer credit demand.

Having hit a fresh two-month low of $1.2200 (€1.17) against the dollar in the previous session, sterling was up by 0.41% against the greenback by early afternoon, trading at $1.2282, but was largely flat against the euro, exchanging hands at €1.1765 (£1.00).

According to the Bank of England, lending to Britons grew at the fastest pace in 11 years in November 2016 as consumer credit rose by £1.93bn ($2.27bn) in the month, compared with the £1.6bn recorded in the previous month and analysts' expectations for an unchanged reading.

Meanwhile, Britain's construction sector fared better last month expanding at the fastest pace in nine months as new orders grew at the quickest rate in almost a year, despite sharp inflationary pressure.

On the continent, the eurozone preliminary annual inflation data also came in stronger than expected in December, standing at 1.1%. The figure was the highest rate in more than three years and came just a month after the European Central Bank extended its quantitative easing measures through to at least the end of this year.

However, the positive data on both sides of the Channel failed to trigger any major movement in the currencies markets, although the euro gained 0.31% against the dollar to trade at $1.0437.

"We've seen relatively modest moves among the major currency pairings today, with forex markets generally overlooking this morning's European data," said Chris Saint, senior analyst at Hargreaves Lansdown.

Investors across the Atlantic will keep a close eye on the release of the minutes from the latest Federal Reserve meeting, during which the US central bank gave the all clear to a second hike in interest rates in 12 months.

"It will be interesting to see just how much the fiscal stimulus plans contributed to the interest rate forecasts from Fed policy makers in December and whether there is potential for the pace to be faster still, if many didn't take it into consideration due to the uncertain nature of what it will actually consist of," said Oanda senior analyst Craig Erlam.

Ahead of the release, the greenback was lower across the board, falling by 0.15% and 0.16% respectively against the yen and the Swiss franc to ¥117.57 and CHF1.0258 and losing against both its Australian and Canadian counterparts.

The dollar was 0.50% lower against the former, trading at AUD$1.3763, and fell by 0.85% against the latter, fetching CAD$1.3313.