Sterling steady near multi-month highs, BoE caution still top of mind

LONDON, Dec 24 (Reuters) - The pound held around a three-month high against a broadly softer dollar and near its firmest in two months against the ?euro on Wednesday, although trading was thin ahead of the ?Christmas holiday.

Sterling briefly inched up to ?as high as $1.35335 in early trading, ?its highest ?since mid-September, though was last flat on the day just ?below that level.

The ?dollar is at similar levels against other European currencies including the euro.

For ?the pound it was ?a ?similar story versus the euro. The common currency nudged down to 87.21 pence, its ?lowest since mid October, but was last flat on the day just above that.

With the Christmas holiday approaching in Britain, and many market participants already off, trading ?was ?thin.

That left sterling still largely shaped by last week's Bank of England meeting.

The ?BoE cut interest rates after a narrow vote by policymakers but it signalled that the already gradual pace of lowering borrowing costs might slow further.

Should that materialise, that would see ?the pound remain supported versus other currencies, particularly the dollar, with the Federal Reserve expected to continue easing next ?year.

(Reporting by Alun John Editing by Bernadette Baum)