With no more UK data due this week traders said attention will now focus on wrangling over US budget problems, the so-called US fiscal cliff, a combination of tax cuts and spending hikes due to kick in at the beginning of 2013. Some analysts said if lawmakers resolve budget problems before the year end, the dollar could weaken. "Any solution to the fiscal cliff is going to be positive for risk appetite, which could initially see the dollar weaken and the pound hold onto these gains," said Philip Hoey, senior account manager at Caxton FX.
Sterling dipped 0.1 percent to $1.6120, retreating from a six-week high of $1.6173 hit on Wednesday after the Fed said it would bolster its quantitative easing programme by $45 billion a month, on top of $40 billion the Fed is already buying in mortgage-backed seacurities. The euro was up 0.2 percent at 81.10 pence, holding within the range roughly between 81.65 and 79.60 pence that it has traded in since October. Strategists said moves in euro/sterling were likely to be swayed by developments in the euro zone in coming months.