LONDON: The pound was little changed on Wednesday, slipping below $1.39 and edging up slightly against the euro, as currency markets calmed ahead of inflation data from the United States.

The dollar recovered some of its losses from the previous session as market participants waited for a US Treasury auction and the inflation reading later in the session.

Sterling has strengthened so far in 2021, climbing as high as $1.424 in February. Analysts attribute the gains to the UK’s relative success in COVID-19 vaccinations, optimism about an economic recovery from the pandemic, a lessening of negative interest rate expectations and relief that a no-deal Brexit was avoided at the end of 2020.

But the gains versus the dollar have eased in recent weeks and at 1144 GMT on Wednesday, cable was down 0.2% on the day at $1.3866.

The pound continued to edge up against the euro, at 85.72 pence per euro at 1145 GMT. Euro-sterling has lost more than 4% so far in 2021. “It’s all about the broader risk dynamics and ultimately that’s still going to be the arbiter of sterling performance (today),” said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.