* Sterling falls after BoE holds interest rates, expands QE
* Euro little changed after ECB keeps rates at 1.0 percent
* Market awaits news conference by ECB's Trichet
(Reledes, updates prices, adds quotes, changes byline)
By Naomi Tajitsu
LONDON, Aug 6 (Reuters) - Sterling fell broadly on Thursday after the Bank of England said it would extend quantitative easing, while the euro was little changed against the dollar after the European Central Bank kept interest rates unchanged.
The BoE's decision to raise the amount of its asset-purchase programme to 175 billion pounds from 125 billion pounds surprised traders expecting a pause in the plan, while many in the market had expected the ECB to hold interest rates at a record low 1 percent.
With the ECB rate announcement out of the way, traders awaited a news conference by President Jean-Claude Trichet at 1230 GMT for more clues into the central bank's outlook for rates and quantitative easing measures.
"We're not expecting anything from the ECB, it's going to be a quiet month (for the central bank)," said Ray Farris, currency strategist at Credit Suisse in London.
"In contrast we had a very dovish innovation from the Bank of England and the market is responding to it appropriately," he added, referring to sterling's broad fall.
Holding interest rates at a record low 0.5 percent, the BoE said it expected to take three months to use up the new funds, and the scale of quantitative easing would be kept under review.
Trichet is expected to stick to a similar assessment to the July policy meeting, when the ECB said it expected economic activity to stay weak for the rest of the year, though the pace of decline was likely to ease.
By 1201 GMT, the euro traded 0.2 percent lower at $1.4380. A slight trimming of long positions weighed on the euro in early Thursday trade, but the pair still hovered in range of a 7 1/2-month high of $1.4448 hit on electronic trading platform EBS on Wednesday.
The euro slipped even as European shares rose 0.8 percent, buoyed by more positive earnings results from Commerzbank and KBC. Higher share prices have been boosting currencies considered to be higher risk, including the euro and sterling.
STERLING LOSSES
Sterling traded at $1.6855. Following the BoE announcement, it fell nearly 1 percent on the day to $1.6825, retreating from the day's high of $1.7030.
Thursday's slide pulled the pound away from $1.7044 hit the previous day, its highest in more than nine months.
It also fell against the euro, which rose 0.3 percent higher to 85.24 pence.
The Japanese currency came under broad selling pressure, weighed by higher share prices, which typically pushes the yen lower due higher risk demand.
The Japanese currency also was on the back foot after a Reuters report that the Bank of Japan will likely forecast three years of deflation, which may delay an exit from low interest rates.
The dollar rose 0.6 percent to 95.50 yen, near the day's high around 95.65 and the euro was up 0.3 percent at 137.25 yen. Against a basket of currencies the dollar rose 0.4 percent to 77.857, edging away from a 10-mth low of 77.428.
The Australian dollar rose 0.2 percent to $0.8418, lifted by better-than-expected Australian employment data, while a higher-than-expected jobless rate in New Zealand pushed the New Zealand dollar down 0.4 percent at $0.6706. (Additional reporting by Jessica Mortimer, editing by Andy Bruce)