By Amanda Cooper

LONDON (Reuters) – The pound weakened slightly against the dollar, which was flat on Thursday as investors continued to focus on who President-elect Donald Trump’s treasury secretary might choose and what that could mean for his policies on economic growth, trade and trade taxes.

With the dollar rising, sterling lost 0.1% to $1.26405.

It rose 1.2% against the euro, which has come under intense pressure especially against the dollar as investors try to factor in the potential impact on euro zone growth of the up-to-date Trump administration’s aggressive stance on tariffs.

The pound briefly rallied yesterday after data showed UK consumer inflation recorded an unwelcome raise in October, confirming market confidence that the Bank of England will be one of the slowest among major central banks to significantly cut interest rates in the coming year .

Even so, sterling has fallen almost 2% against the dollar this month and has turned negative for the year.

Money markets currently show that investors believe the BoE could cut interest rates by around 68 basis points by December next year. No moves are expected regarding the next Bank meeting scheduled for December 19.

Commerzbank (ETR:) strategist Michael Pfister noted that the probability of an interest rate cut in February is also only 50%.

“We still believe that there will be another interest rate cut then. The argument for this is that monetary policy is likely to continue to be perceived as quite restrictive, and policymakers will certainly want to avoid being left behind,” he said.

He added that if inflation data show a sustained raise, discussions around the February cut “will likely intensify.”

Next (LON:) the macro calendar will feature preliminary surveys of economic activity in November for the UK, the euro zone, the United States and other countries, which will be published on Friday.

The latest Purchasing Managers’ Index (PMI) for October put the UK at 52 points, above the 50-point divide between growth and contraction and putting the UK in second place behind the US, which recorded a score of 54 last month.

According to a survey by Reuters economists, Friday’s PMI is expected to be 51.8.