Sterling gained against a broadly weaker euro on Thursday as European officials expressed discomfort over the single currency's recent rise. Some traders said the pound took support from a sale of 20-year gilts that drew sold investor demand. Sterling took in its stride an unexpected drop in a UK manufacturing purchasing managers' index.
The euro extended losses against the pound after European Central Bank President Jean-Claude Trichet said excess currency moves have adverse implications. Earlier in the week, he said it was "extremely important" to have a strong dollar. Earlier, the single currency came under pressure after the European Union's Economic and Monetary Affairs Commissioner Joaquin Almunia said eurozone finance ministers would discuss the currency's appreciation before a meeting of Group of Seven finance chiefs in Istanbul on Saturday.
The euro fell as low as 90.91 pence, near its lowest level in a week. By 1401 GMT, it was down 0.3 percent at 91.12 pence. Traders said support was seen near 90.80 pence. Sterling was down 0.2 percent at $1.5981, after falling to around $1.5940 as data showed the UK manufacturing PMI unexpectedly fell in September for a second consecutive month.