Sterling steadies against dollar ahead of long Easter weekend

By Yadarisa Shabong

(Reuters) - The pound gained against the euro on Thursday and held steady against the U.S. dollar after economic data over the last week eased concerns about the British economy against the backdrop of U.S. tariffs.

Concerns about the impact of U.S. tariffs on growth and inflation have driven investors away from U.S. assets, including the dollar.

Sterling steadied at $1.3243 and was on track for eight straight days of gains against the U.S. currency.

It also strengthened against the euro, which dipped to 85.90 pence ahead of an expected rate cut by the European Central Bank later on Thursday.

Trading volumes and volatility were subdued ahead of the long Easter break, with UK markets closed on Friday and Monday.

Economic data has shown UK economic growth holding up, inflation slowing and wage growth strong despite a fall in job vacancies in the run-up to an increase in employer tax this month.

Together with expectations of a possible U.S.-UK trade deal and a weakened dollar, Britain's economic resilience has helped the pound to rally.

"The backdrop for the UK and for sterling really is not too bad," Kenneth Broux, head of corporate research FX and rates at Societe Generale, said.

"As long as we don't have another leg of risk-off and another spike in gilt yields, sterling should continue to do quite well."

UK gilt yields, which surged last week on worries about Trump's trade tariffs, have eased this week.

(Reporting by Yadarisa Shabong in Bengaluru; editing by Barbara Lewis)