LONDON - The pound was flat on Thursday, hovering near its lowest level against the dollar in a month, as traders maintained a cautious stance and waited for potentially market-moving U.S. inflation data due later in the day.

Sterling held its ground at $1.3076, up marginally from Wednesday's trough of $1.3057, its lowest since Sept. 12.

The U.S. economy and the dollar have been driving global markets over the last week or so, after a much stronger-than-expected September employment report caused investors to scrub out their bets on another outsized interest rate cut from the Federal Reserve.

As markets have recalibrated, U.S. bond yields have climbed relative to other countries, boosting the appeal of the dollar.

"(The market's expectations of) the Fed's terminal rate for this easing cycle has been repriced 50 basis points higher over the last few weeks," said Chris Turner, global head of markets at ING. "And short-dated yields have moved significantly in the dollar's favour."

The pound has fared better against the euro - a reflection of the relative strength of the British economy compared with the euro zone.

Germany's economy is likely to contract by 0.2% in 2024, the economy ministry said on Wednesday, which would be its second consecutive year of shrinking output.

The euro has fallen around 1% against the pound over the last month, and was trading lower again on Thursday at 83.60 pence.

Currency markets were subdued ahead of U.S. consumer price index data for September, due at 1230 GMT, which is likely to show that inflation eased to 2.3% from 2.5% in August, according to economists polled by Reuters.

(Reporting by Harry Robertson; Editing by Sherry Jacob-Phillips)