Sterling held near this year's high against the dollar but hit a seven-week low against the euro on Thursday as a UK interest rate decision played second fiddle to broader market moves. The Bank of England (BoE) kept rates at 4.75 percent for the seventh month in a row. Economists had widely forecast the decision, though many expect higher rates by the middle of the year.
Renewed dollar selling helped sterling climb above $1.93 in early trade - within a quarter-cent of this year's high - but it pared gains after the rate verdict to stand little changed at $1.9240 at 1600 GMT.
"There were some long cable positions on the off chance of a hike so some people might have been disappointed," said Riz Din, foreign exchange strategist at Barclays Capital.
The pound traded with a weaker bias against the euro as the single currency proved the bigger beneficiary of bearish dollar sentiment. Sterling stood at 69.66 pence per euro in late European trade, having hit a seven-week low of 69.75 pence earlier in the session.
Figures on Friday are forecast to show the US trade deficit widened to $56.50 billion in January from $56.40 billion in December, moving back towards record levels hit late last year.
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