Sterling rose more than half a percent against the dollar on Thursday, part of a wider dollar decline against the euro and other currencies, but stayed stable after the Bank of England kept interest rates unchanged.
"The way I would characterise the moves in sterling was that there was not much of a reaction to the rate decision," said Petya Koeva, currency strategist at Barclays Capital.
By 1457 GMT, sterling was up 0.44 percent against the dollar at $1.743. Against the euro, the pound was little changed at 67.53 pence per euro.
The pound reached three-week highs against both currencies earlier in the day.
"In the last couple of days, there have been some pretty big moves in the euro/dollar rate, and that's what has driven the pound higher," Koeva said.
All 45 analysts in a Reuters poll had forecast that the Bank's Monetary Policy Committee would keep interest rates at 4.5 percent after last cutting them by 25 basis points in August.