The pound was last down 0.3 percent on the day at $1.5572, slipping from a one-week high of $1.5716 hit on Thursday. Traders cited bids around $1.5535-45.

Sterling has struggled in recent weeks on rising expectations of further quantitative easing, (QE), to boost the faltering UK economy. Another round of QE would expand the BOE's balance sheet and flood the market with the UK currency.

Some market participants are speculating the BoE may signal further easing as early as next week, at its Monetary Policy Committee meeting.

"QE will happen, the only question is when. It's more probable they will announce it in November which is an inflation report month and will allow the MPC to explain why they are easing policy despite inflation being so high," said Raghav Subbarao, currency analyst at Barclays.

Looser monetary policy can feed inflation, which in the UK is running at 4.5 percent, more than double the BoE's 2 percent target. But policymakers are now more focused on supporting growth, rather than price pressures.

Market players said those investors betting on an October start to QE may have to unwind their bearish bets on sterling if the BoE's Monetary Policy Committee delays more easing until November. That could help sterling rally, Subbarao said, but lasting gains were seen as unlikely.

"It will be very short-lived. If QE does not happen next week it is very likely it will happen in November," he said.

Technical traders highlighted a bearish "death cross" in cable after the 50-day moving average closed below the 200-day moving average earlier this week for the first time in roughly a year. The last time these two averages crossed in the opposite direction, cable rallied from around $1.5450 to $1.6300 in the space of two months.

EUR/GBP FIX

Month and quarter end rebalancing flows are also likely to weigh on sterling against the dollar, traders said.

The euro dipped against the pound, trading down 0.1 percent at 86.89 pence. Traders were expecting a lot of interest to buy and sell euro/sterling at the ECB fix at 1215 GMT, and also cited bids around 86.50 pence.

The ECB sets a reference rate for the euro at that time and the banks have matched their customer orders to that rate.

There was market talk of UK bank selling up to an estimated 4 billion euros for the conversion of EU agricultural subsidies, possibly to be offset by more regular EU sovereign month-end demand. "The problem is the world knows about the tickets so the market is shorter than the actual fix," a London-based spot trader said, referring to the sell order for agricultural subsidies. "It's a horrible ticket, nobody ever wants it. It will be very messy."

Market players said the euro could fall initially but the competing buy and sell orders were likely to net out later in the session.