Governor Mark Carney sent a clear signal two weeks ago that stimulus was on the way in an attempt to show the economy was in safe hands while the country's political leadership crumbled after the EU vote.
The central bank is expected to halve its benchmark interest rate to a new record low of 0.25 percent when its makes a monthly policy statement at 7.00 a.m. ET on Thursday.
Carney has expressed opposition to following the lead of the European Central Bank and the Bank of Japan by cutting rates below zero. Many economists say the BoE will instead revive its quantitative easing program of buying bonds to help the economy as it faces the prospect of years of uncertainty about its trading relationship with the EU and the rest of the world.
The U.S. dollar fell on Wednesday as risk appetite receded after big moves earlier in the week and following the Bank of Canada's decision to hold interest rates steady, which may provide clues about future central bank action.
The dollar slipped against the low-yielding euro and traditionally safe-haven Swiss franc and Japanese yen, which recorded its biggest two-day loss against the dollar in nearly two years on Monday and Tuesday.
Since the start of the week, the yen had tumbled 4 percent against the dollar - its worst performance since November 2014 - after Japanese Prime Minister Shinzo Abe's ruling coalition won a clear victory in upper house elections, fuelling expectations of more fiscal stimulus measures.
The dollar index, which measures the dollar against a basket of major currencies, was down 0.2 percent at 96.250.
U.S. import prices rose less than expected in June as rising costs for petroleum products were offset by declining consumer and capital goods prices, suggesting inflation could remain benign for a while.
Import prices increased 0.2 percent last month after jumping 1.4 percent in May. Import prices excluding petroleum dropped 0.3 percent after gaining 0.4 percent the prior month.
The U.S. economy continued to expand from mid-May through the end of June but there was little indication that inflation would surge any time soon, the Federal Reserve said on Wednesday.
Wage pressures were "modest to moderate" in most of the central bank's districts and price pressures remained slight, the Fed said in its Beige Book report of anecdotal information collected from business contacts across the country.
The Federal Reserve could hike interest rates up to two times before year end, a top U.S. central banker said on Wednesday, slightly downgrading his expectations for monetary tightening even though he said the economy is on "fairly firm footing."
Philadelphia Fed President Patrick Harker, when he last spoke publicly in late May, predicted two to three rate increases this year. Since then U.S. jobs growth plunged one month and then shot back up the next, while Britons voted to leave the European Union.
Global headwinds are undercutting the Federal Reserve's efforts to boost the U.S. economy, making low interest rates not nearly as stimulative as they were when the rest of the world economy was growing faster, a top Fed official said on Wednesday.
A "slow, gradual, careful" approach to raising interest rates is therefore appropriate as the U.S. central bank deals with this new world of slower growth, Dallas Fed President Robert Kaplan said in a speech in Houston.
The Fed, he added, needs to calibrate monetary policy more cautiously now than it did five or six years ago in the face of China's economic slowdown, the possible impact of Brexit on global and U.S. economic growth, and other global threats.
Oil markets tumbled more than 4 percent on Wednesday, erasing most of the previous session's gain, as a raft of bearish U.S. inventory data heightened concerns about a global glut.
U.S. crude stockpiles fell less than expected last week, distillate inventories rose the most since January and gasoline stocks unexpectedly increased, the Energy Information Administration (EIA) said, painting an unusually weak demand picture during the traditionally busy summer driving season.
The U.S. government's EIA said crude inventories fell 2.5 million barrels last week, less than a 3 million-barrel drop forecast in a Reuters poll.
Brent crude settled down $2.21, or 4.6 percent, at $46.26 a barrel.
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