Sterling dipped against the dollar and was steady against the euro in choppy trade on Thursday ahead of the long Easter weekend, little influenced by a Bank of England decision to leave interest rates unchanged. Earlier in the session, sterling was helped to a day high against the euro below 90 pence on news that UK bank Barclays PLC was selling its iShares asset management business for 3 billion pounds.
Bumper quarterly results from Wells Fargo gave a kick start to US stocks, which opened up 2 percent, providing support to sterling and helping it to erase earlier falls. However, analysts and traders said liquidity was extremely thin going into the Easter holiday, which left trade volatile.
"The market is in complete wind-down mode in the run up to Easter, particularly as the end of the fiscal years behind us," CMC Markets analyst James Hughes, said. Sterling was down 0.3 percent against the dollar at 1.4657 at 1549 GMT. The euro fell 0.1 percent to 90.12 pence.
The euro was not far off an earlier session low of 89.95 pence as the pound was helped by the Barclays news and as UK stocks extended gains. "Its clearly a risk-on day - the Wells Fargo results were very good and reinforced risk appetite. This has helped sterling, which tends to benefit in this environment," State Street currency strategist Lee Ferridge said.
He added that the BoE decision was a "non-event", although there had been some nervousness in the market that the central bank could expand its quantitative easing programme. The Bank of England earlier left UK borrowing costs at a record low 0.5 percent, as expected, and said it would continue a 75 billion pound asset-buying programme to lift the economy out of recession.
The decision contained no surprises and had barely any impact on the pound, which analysts said remained broadly lower as it reversed strong gains earlier in the week. Gains earlier in the week took the pound to a two-month high of $1.4958 against the dollar on Monday and the euro to a one-month low of around 89.59 pence on Wednesday.
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