Sterling eased from recent one-month peaks against the dollar on Thursday after a brief flurry higher when the Bank of England cut rates for the first time in two years in line with expectations.
Britain's central bank cut interest rates by a quarter point to 4.5 percent to shore up household and business spending. Other asset prices reacted calmly to the rate outcome with little reaction from British stocks.
Markets remained uncertain about future interest rate decisions but more rate cuts were seen on the cards.
"Clearly the news on the interest rate decision was pretty much in line with expectations. The market is probably still leaning towards another cut although I think the commentary from the bank was a little bit more optimistic than that dovish interpretation," Tim Fox, FX strategist at Dresdner Kleinwort Wasserstein, said.
At 1425 GMT, sterling traded at $1.7772 against the dollar, steady on the day. It had hit a one-month high on Wednesday at $1.7831 and session highs of $1.7819 on Thursday.
Versus the euro it was steady at 69.41 pence.
A sluggish economy and worries over consumer spending since the July 7 bombings in London and a failed attack two weeks later had already stoked expectations of a British rate cut.
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