LONDON, Feb 6 - Sterling firmed a touch versus the euro and dollar on Friday, enjoying support from the previous session's UK rate hike but also keeping a close eye on other major currencies ahead of this week's Group of Seven meeting. Analysts expect the dollar's protracted decline to force its way onto the G7's agenda but doubt the Friday-Saturday meeting in Boca Raton, Florida will forge a deal to slow the U.S. currency's slide. Concerns about what this will mean for the major currencies, including sterling, competed with the effects of Thursday's rate hike from the Bank of England but the prospects of more yield-boosting hikes still provided underlying support. "Everything points to euro/sterling continuing to decline and test what could be a quite key level around 68 pence per euro," said Steve Barrow, currency strategist at Bear Stearns.
At 0855 GMT, sterling traded a touch firmer at 68.33 per euro . The pound hit a three-month high of 68.10 pence on Wednesday in the run-up to Thursday's rate hike. A move to 68 pence would take the pound back to levels last seen in early 2003. It was also a bit higher on the day at $1.8361 . A poll, conducted after the BoE raised the overnight repo rate by a quarter of a percentage point to four percent, showed analysts predicting a further raise in UK rates as soon as in May. Relatively attractive yields have boosted sterling in recent months, helping it rise about 10 percent against the dollar since the BoE last raised rates in November last year.//