The British pound was steady against the dollar having hit an 11-month high after the Federal Reserve raised rates but signalled an end to its tightening cycle.
The US central bank raised its benchmark rate by a quarter point but dropped from its policy statement language that said it "anticipates" further rate increases would be needed, sending the dollar lower against other major currencies, including the pound.
"It (the pound) has capitalised on the weaker dollar in the wake of the dovish Fed decision," said George Vessey, foreign exchange and macro strategist at Convera. Sterling had little changed against the dollar at $1.2567, having hit its highest level since June last year at $1.2593 overnight.
The pound was edging higher against the euro ahead of an expected rate increase from the European Central Bank, with the size of the move still up for debate.
With about a 20% likelihood of a greater 50 basis point increase, the markets have fully priced in a move of 25 basis points. Among the 69 economists queried by the media, 57 predict a quarter-point change, while the remaining 12 predict a 50 basis point increase.
The euro recently traded at 87.94 pence, down 0.1% from the pound. In the meantime, a poll revealed that the UK's services sector experienced its quickest growth in a year in April, helped along by new orders, but company pricing increased, increasing pressure on the Bank of England to continue rising interest rates.