Sterling rose on Monday, boosted against the dollar after a weak reading of US employment kept the US currency under broad selling pressure. The pound was supported versus the dollar, but gains were capped and sterling was unable to push higher against the euro as investors remain wary of the UK's mounting debt burden and weak economy, along with concerns about political uncertainty.
"Sterling is unlikely to outperform. If we get any bad news, euro/sterling will weaken," said Paul Robson, currency strategist at RBS in London. By 1440 GMT, sterling had climbed 0.6 percent to $1.6130, near the day's high of $1.6194.
Sterling's gains were capped, with traders citing sell orders from Middle Eastern names as the pair approached the $1.62 level.
The pound poked above its 200-day moving average against the dollar around $1.6117 on Monday. Some in the market said that level would likely keep a ceiling on near-term gains. Others said they expected sterling in the near term to push above the mid-$1.6250 level, which would be its strongest in roughly a month, but in the absence of any big driver, significant gains beyond that would likely be limited.
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