Sterling rose against the euro on Wednesday after Bank of England minutes showed the recent decision to pause its asset purchase programme was unanimous, but sentiment towards the pound remained shaky. The pound's rise was limited after data showed a rise in UK jobless claims versus consensus for a drop in the count.
"Sterling's eventual rise versus the euro today has come as a result of the BoE minutes. I don't think anyone was looking for 9-0 and the pound has benefited slightly from that," said NAB currency strategist Gavin Friend.
At 1532 GMT, the pound was trading up around 0.3 percent versus the euro at 86.95 pence. It had earlier risen to 86.87. Against the dollar, sterling relinquished earlier gains to trade down 0.3 percent at 1.5740 as the greenback gained broadly following strong US housing data. The pound had initially fallen slightly as traders reacted to the number of Britons claiming unemployment benefit rising unexpectedly in January and by the largest amount since last July.
The BoE minutes led some to believe that a resumption in its quantitative easing programme QE was less likely, with inflation jumping in January. But others believed that asset purchases could resume in the future. Investec chief economist Philip Shaw said: "Certainly the hints coming from the inflation report conference last week did suggest that the committee seriously considered the option of increasing asset purchases again." Overall sentiment towards the pound would remain negative, analysts said.