Sterling rose a quarter percent against the euro on Friday after stronger than expected data on the UK services sector. The February service sector PMI gave a reading of 58.9, its strongest showing since April 2004 and up from 57.0 in January.
The British report outshone the eurozone's, even though that PMI index gave a reading of 58.2, its highest level since September 2000.
The pound was steady against the dollar, which gained a late fillip on Friday from US services sector data giving an even stronger reading of 60.1 in February.
"The UK service sector PMI gave a boost to sterling - sterling came off against the euro yesterday, so the data provided the opportunity for a bit of a correction," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.
Sterling rose as far as 68.44 pence per euro and was trading at 68.51 pence at 1525 GMT, off two-week lows of 68.69 pence set on Thursday.
It was steady at $1.7548, a drop of nearly half a cent from the day's highs set ahead of the US data.
The UK service sector data enabled the pound to win back some lost ground after falling nearly one percent against the euro on Thursday, its biggest one-day loss since early August, following a quarter point rise in eurozone interest rates to 2.5 percent.In contrast, a majority of analysts polled by Reuters this week expect the next move in UK interest rates to be a cut from the current 4.5 percent, although rates are seen steady at the Bank of England's meeting on March 9.
Also next week, UK investors will look to January trade and manufacturing data on Thursday.