Sterling tested eight-month highs against the euro on Friday, shrugging off a below forecast manufacturing survey and supported by recent upbeat housing data which have fuelled speculation of another UK rate hike soon.
Although all 54 UK economists polled this week by Reuters expect the BoE to leave rates unchanged next Thursday, 40 of them forecast a hike to 5 percent in November.
By 1353 GMT, sterling was steady on the day at 67.28 pence, near an earlier session high of 67.20 pence. A move beyond that level would take it to its strongest since mid-December.
"Euro/sterling is still maintaining its downward momentum," said Steve Barrow, currency strategist at Bear Stearns. Versus the dollar, sterling traded at $1.8996, retreating from Thursday's three-week high of $1.9092 after the greenback got a broad-based boost from a slightly stronger than expected US non-farm payrolls report for August.
The pound matched this week's two-year highs against a trade-weighted basket of currencies at 103.4.
Sterling shrugged off data showing growth in Britain's manufacturing sector eased more than expected in August, to its slowest pace in five months. The CIPS/RBS manufacturing PMI fell to 53.1 from July's downwardly revised 53.6. But analysts said that with the index still firmly above the 50 watermark between contraction and growth the sector remained in robust health.
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