LONDON: Sterling gained a third of a percent against a broadly weaker euro on Tuesday but was still wavering on the verge of a fall back below $1.50.
The key domestic events for sterling this week are on Wednesday, with Bank of England minutes to be scrutinised for signs of a U-turn by either of the two policymakers who have voted for higher interest rates in recent months.
Sterling has suffered from a pushback in expectations for higher BoE rates towards 2016, when just months ago many in the market were expecting a move early this year.
But dealers said the decisive event for the pound is still more likely to be the fallout from Thursday's decision by the European Central Bank on whether to embark for the first time on outright money-printing to stir a moribund euro zone economy.
"Whether sterling falls below $1.50 will essentially depend on what the ECB does. I don't think the (BoE) minutes will take it there," said Graham Davidson, a spot currency trader with NAB in London.
"One of those (BoE) votes may have changed and that would be a slight negative for the pound but it may be the tone of the discussion that is most important."
Britain's inflation rates have sunk along with those across Europe thanks to the collapse in oil prices and a supermarket price war that has slashed grocery bills.
But BoE policymakers have tended in the past to look through such effects as not reflective of broader demand in an economy which has come off the boil but still looks far healthier than most of its European peers.
The pound gained around 0.3 percent to trade at 76.54 pence per euro. Against the dollar, it was 0.1 percent higher at $1.5143.
"The lack of any rebound suggests we could be set for a move lower (on sterling) but while we hold above $1.5090 the prospect of a move back towards $1.5320 remains," analysts from CMC Markets in London said in morning note.
"A move below $1.5090 targets the lows this month at $1.5035, with a break below $1.4980 targeting $1.4810."
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