THE pound has remained broadly unchanged against sterling but turned slightly weaker against the deutschmark. The Irish currency managed to continue to trade at just above parity with sterling to close at 100.29p yesterday.

After its dramatic fall on Tuesday from four year high levels against the deutschmark, sterling was unable to regain any significant ground.

Analysts said, however, that this is only a temporary setback and the British currency should be able to go strongly ahead again shortly.

Sterling was hit by profit taking and by the fallout from a Bank of England gilt auction that got a poor reception from the American bond market.

The pound drifted marginally lower against the deutschmark at DM2.56, dropping from three year high levels reached in weeks of DM2.58.

Most analysts now expect that both the pound and sterling will remain broadly at current levels over the next couple of days with heavy corporate buying keeping a floor of parity between the two currencies.

The deutschmark slipped against the French franc, but was little changed against the other leading European currencies.

The dollar slipped against all of the major currencies, in what market analysts said was a correction following its sharp rise earlier in the week.

"The dollar's rise was so strong on Tuesday that the market had the feeling it had gone too far," said Mr Ian Donald, an analyst at Lazard Brothers Asset Management.

The market is now waiting for official US figures on unemployment and job creation due tomorrow. Analysts are also looking to British manufacturing output figures for October and to next Wednesday's monthly monetary meeting between the Chancellor of the Exchequer, Mr Kenneth Clarke, and the Bank of England Governor, Mr Eddie George.