LONDON: Sterling lost some steam but remained above $1.27 in later trade on Thursday after British finance minister Rishi Sunak announced a new job support scheme but said unemployment would rise. Against the dollar, sterling was down 0.1% at $1.2718 by 1515 GMT after hitting a two-month low of $1.2676 on Wednesday, and having bounced back to $1.2780 in earlier trade. Against the euro, sterling was flat at 91.56 pence.
In a choppy session, fears that unemployment will rise when the furlough scheme ends next month kept investors nervous, as Sunak announced more government support to rescue businesses and jobs but said the British government will support only viable jobs.
"The main question is who is going to determine what is the definition of a viable job," said Naeem Aslam, chief market analyst at AvaTrade, adding that rising unemployment will take a toll on sterling. The British currency was also under pressure after the Bank of England did not exclude the possibility of negative rates, which is seeing as a downside risk for sterling.
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