LONDON: Sterling tracked the euro higher against the dollar on Friday, though its rise was limited by concerns about a weak UK economy and the possibility of more monetary easing from the Bank of England.
The euro rose but continued to trade within recent ranges on speculation about when or whether Spain will ask for a bailout and trigger a European Central Bank plan to start buying its bonds. The gains helped lift the pound and other perceived riskier currencies.
The pound was up 0.2 percent at $1.6078, holding above Tuesday's one-month low of $1.5975 but below the peak of $1.6310 reached in late September.
"The general feeling in the market is that everyone is in wait-and-see mode because of all the 'will they won't they?' debate over a Spanishbailout request," said Alex Lawson, senior broker at Moneycorp.
"A lot of people are sitting on the sidelines and there is a reluctance to push currencies through big resistance levels."
The euro was steady at 80.51 pence, staying above a low of 80.23 pence reached on Thursday.
However, it was stuck firmly below strong chart resistance at the mid-September peak of 81.14 pence and the 200-day moving average at 81.18 pence.
"There is massive resistance at 81.00-81.20 and if the euro moves above there we could get a big move towards 84.00," said Chris Turner, head of currency strategy at ING.
But he said he expected this resistance to hold and the euro to drift lower, partly due to concerns about a weak euro zone economy.
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