Britain's trade deficit with the rest of the world narrowed to 5.44 billion pounds in September from 5.9 billion in August, compared with forecasts for a 5.3 billion pound deficit.
The pound hit the day's lows against the dollar and the euro after the data, but quickly recovered ground against the euro.
"It (trade data) was slightly worse than the market had expected but it had more of an impact on cable (sterling/dollar) than euro/sterling," said Petya Koeva, currency strategist at Barclays Capital.
"Given the political uncertainty in France, the scope for the euro to move upward is limited."
The euro approached this week's 2-year lows against the dollar on the euro zone interest rate outlook on Wednesday, with two weeks of nightly riots in France's poor suburbs seen as a contributory factor.
Sterling strengthened as far as 67.39 pence per euro by 1445 GMT, up a quarter percent from the US close. But it fell a quarter percent against the broadly stronger dollar, to $1.7386.
All 44 economists polled by Reuters last week expected steady rates in the UK this week, after the central bank cut interest rates by a quarter point to 4.5 percent in August.
But most economists expect a rate cut in the first quarter of next year to shore up growth.
The Bank of England makes its policy decision at 1200 GMT on Thursday, following its two-day meeting.
"It is taken as a given that the rate will remain unchanged," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.