Pound sterling
Pound sterling bundles Reuters

The British pound traded at a six-day high ahead of the Bank of England policy decision helped by the broad dollar weakness after the FOMC minutes showed US policymakers are concerned about the strength of the greenback.

The sterling has been on an upward trend since 6 October and at Thursday's high of 1.6218, the currency is 1.67% off the eleven-month low of 1.5952 touched on 3 October.

Data from the UK has been largely mixed so far in October with manufacturing and services PMI showing declines even as the construction PMI posted a positive surprise.

Similarly, industrial output came in weaker than expected while the manufacturing number was on the higher side. Halifax house price data was hawkish but the RICS data came in dovish.

At the same time, US jobs data confirmed that the labour market in the world's largest economy is strong enough to strengthen the call for a sooner rate hike by the central bank, dragging major currencies like the pound to new lows.

The BoE is widely expected to keep the bank rate at 0.5% and leave the asset purchase target at £375bn at the meeting on Thursday at 12:00 BST.

The central bank is unlikely to provide any statement along with the decision; therefore, the decision will most likely be a non-event, according to analysts.

However, the market will look for the MPC meeting minutes due after two weeks. Details of the last two meetings showed that two policymakers have been clearly on the hawkish side and have voted for a hike.

Any change in the voting pattern this time will have related impact, analysts say. However, before the release of the 22 October minutes, August trade data, September CPI inflation and August/September labour market data will be out, which can potentially move the pound.

Overall, the next two weeks will be more important for sterling despite the policy decision falling in this week's calendar.