Sterling was broadly steady today ahead of a key Bank of England interest rate decision later this week that many analysts see as too close to call. 

Weak economic data and dovish comments from Bank of England policymakers have fuelled speculation that the bank could cut rates as its January 30 policy meeting.

But new upbeat economic numbers in recent days have cast doubt on that view. 

Friday's readings of the IHS Markit/CIPS UK Purchasing Managers' Index (PMI) showed Britain's vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased. 

Sterling was steady at $1.3077 today, holding below a more than two-week high touched briefly on Friday at $1.3180. 

Against the euro, sterling hovered at 84.38 pence - a touch softer on the day. 

"This Bank of England meeting follows a run of fairly weak economic data over the last few weeks but with last week's strong employment data and better than expected flash PMIs confusing the picture," said Deutsche Bank strategist Jim Reid. 

"Our economists have expected a cut for a good couple of months now but markets are closer to 50:50," he added. 

Analysts noted that market positioning data released on Friday by the US Commodity Futures Trading Commission suggests that while speculators have slightly cut their net long sterling positions, they still maintain an overall long position on the pound. 

Those bets on further gains in the British currency could be vulnerable as Thursday's Bank of England meeting draws nearer, putting downward pressure on the pound, they said. 

Britain will formally leave the European Union on Friday.